I wanted to throw a quick post up. Things are super busy so I don't have a lot of time tonight.
I did want to say a few things about the horrific consumer credit numbers today:
"By Greg Robb WASHINGTON (MarketWatch)-
U.S. consumers reduced their credit burden by a record amount in July, the Federal Reserve reported Tuesday. Total seasonally adjusted consumer debt fell $21.55 billion, or at a 10.4% annual rate, in July to $2.47 trillion. This is the sixth straight monthly drop in consumer credit.
Consumers have retrenched since the financial crisis hit the economy in full force last September. Credit has fallen in every month since then except January.
Economists surveyed by Market Watch expected consumer credit to decline by $4.3 billion. This is the longest consecutive string of declines in credit since the second half of 1991. In the subcategories, credit-card debt fell $6.11 billion, or 8.5%, to $905.58 billion. This is the record 11th straight monthly drop in credit card debt. Non-revolving credit, such as auto loans, personal loans and student loans fell a record $15.44 billion or 11.7% to $1.57 trillion"
Translation? The consumer is tapped out on credit and has no ability to borrow anymore. You gotta love our brilliant Wall St economists. they were only off 500% on their forecast of a $4 billion in credit availability versus the $21 billion reported.
Where on earth is this "recovery" going to come from when we have consumers that can't consume in an economy that is 70% driven by consumer spending?
How is J6P going to buy those next generation I-phones when their credit card is tapped out?
How are homeowners that have been living off of their credit cards in order to pay the mortgage going to survive and continue to make their payments as their availability to credit evaporates?
The way the market is acting right now is pure lunacy IMO. The fact that stocks continue to rise in the face of such news is unbelievable. The dollar was down hard again as the world continues to rapidly lose confidence in our ability to pay back our debts.
The risk of the US bankruptcy rises each day as we continue to write checks for money we don't have.
I mean look at the dollar over the past few days. Can the investment world be anymore clear in terms of sending a message about what they think about our fiscal strength as a result of our insane deficit spending? :
A strong currency is the symbol of a strong economy. We are coming dangerously close to breaking levels in the dollar that could could trigger another deeper sell off.
We cannot handle inflation via a collapsing currency right now people. Wages are dropping and unemployment is through the roof! You will start to see catastrophic consequences here in the US if we continue down this path.
We already have over 35 million on food stamps in this nation. The dollar MUST be protected shortly or we are in deep trouble.
And if we decide to continue down this path?
Social chaos will become a serious threat because no one will be able to afford to live in this country. Our bloated mortgage payments, rising oil/commodity prices(oil was up over $3 today) thanks to a crashing dollar , and shrinking credit card limits are forcing many Americans to run out of options when it comes to putting food on the table.
I am seriously concerned about the dollar and Obama's obsession around deficit spending.
Its time for America to stop the bailouts and start paying off some bills!