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American Spending Goes Into Overdrive As Savings Plunge To 2008 Levels

Tyler Durden's picture


Why save when one can spend (and, more importantly, why save when one has ZIRP)? This appears to have been the motto of American consumers in the past three months when the US Savings rate has plunged from 4.7% in December to a tiny 3.7% in February: the lowest since December 2007's 2.6%, and just as the recession and the market crash was about to send everyone scrambling for the safety of bank savings. The reason: in February personal spending soared by 0.8% on expectations of a 0.6% rise, while incomes barely rose by 0.2% on a consensus rise of 0.4%. Which means the balance had to be savings funded. So even as we have seen retail weakness in the past three months, we now know that it was not only credit funded, but also forced US consumers to burn through their meager savings. And all this before the gasoline price shock hit. The question then is: with the remainder of US savings about to be tapped out on gasoline purchases, just where will the money come to fund all those priced in NEW iPad acquisitions? Or will Apple finally use up its cash hoard and start a captive lending unit, giving consumers credit to purchase its products?  At the rate the US consumer is going broke it may soon have no other option.


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Fri, 03/30/2012 - 08:46 | 2303104 Jim in MN
Jim in MN's picture

Exactly what the Fed said they wanted last week. 


Slogan for the decline of the West: 


Deleveraging is Death.

Fri, 03/30/2012 - 08:59 | 2303142 fightthepower
fightthepower's picture

Stupid fuckers never learn. 

Fri, 03/30/2012 - 09:05 | 2303162 Chief KnocAHoma
Chief KnocAHoma's picture

A report from our White House mole;

Fri, 03/30/2012 - 09:41 | 2303272 CuriousPasserby
CuriousPasserby's picture

A blog post loses all its credability when the author doesn't know the difference between "their" and "there." Sorry.

Fri, 03/30/2012 - 09:44 | 2303284 Chief KnocAHoma
Chief KnocAHoma's picture

Thanks. Fixed it.

You're so nice.

Fri, 03/30/2012 - 09:53 | 2303303 francis_sawyer
francis_sawyer's picture

So I guess personal savings is on the rise then? (Mr. "credAbility")

Fri, 03/30/2012 - 12:31 | 2303779 overbet
overbet's picture

I wonder about this mega millions jackpot. Someone told me it is going from 400 to 750 million. Does that mean consumers are going to dump $400m on tickets this week? That amount would have to affect retail sales data wouldnt it?

Fri, 03/30/2012 - 11:10 | 2303555 JohnKozac
JohnKozac's picture

wear is that mistake....I'll help him fix it....

Fri, 03/30/2012 - 15:57 | 2304633 Esso
Esso's picture

Psssssst, it's misteak.

Yu'l not bee alow'd to join the sheeple core untill you lerne to spel.

Fri, 03/30/2012 - 18:38 | 2305155 DorseyCecil68669
DorseyCecil68669's picture

my friend's aunt makes $72/hr on the internet. She has been without work for six months but last month her payment was $19183 just working on the internet for a few hours. Here's the site to read more .....

Fri, 03/30/2012 - 09:06 | 2303156 withnmeans
withnmeans's picture

I called this spot on, before the report came out. This is indeed a "no brainer". This is the American way, stay in debt, and pay, pay, pay interest. Here lies the problem, remember all of those times you have seen on TV, those bad math scores for students in the U.S. compared to the rest of the world. People here do not understand the math on interest rates, if they had no credit card debt and lived "WITHNMEANS", then more then likely they could buy twice the amount of crap then they have now.

The Big Bad Banks OWN YOU!

Fri, 03/30/2012 - 09:16 | 2303194 Kaiser Sousa
Kaiser Sousa's picture

Not if u default....
then u own the fucking bankers......

Fri, 03/30/2012 - 10:06 | 2303341 Silveramada
Silveramada's picture




Fri, 03/30/2012 - 10:17 | 2303356 trembo slice
trembo slice's picture

You're right about Jesus overturning tables and calling out the twisted elites at the temple, but your ALL CAPS is so annoying.  Jesus would probably slam your keyboard on your face.

Fri, 03/30/2012 - 10:24 | 2303387 Silveramada
Silveramada's picture

CAPS? it was pressed on  the keyboard by accident and i wtrote it so fast without correcting it... no sin for that one, but maybe Jesus who knows better would slam the whole PC and monitor on your face instead due to the violent intention behind your reply, don't you think?

Fri, 03/30/2012 - 11:13 | 2303565 trembo slice
trembo slice's picture

don't blame the speculators!

Fri, 03/30/2012 - 10:43 | 2303455 Kaiser Sousa
Kaiser Sousa's picture

Hey trembo...don't b a childish smart ass...
focus on the message if u can or care...

Fri, 03/30/2012 - 08:46 | 2303105 walidsassia
walidsassia's picture

they are Buying AAPL product 

Fri, 03/30/2012 - 09:05 | 2303132 easypoints
easypoints's picture

and we are buying PM's. I'm fairly certain neither are counted as "savings" according to the data. Fine by me!

Fri, 03/30/2012 - 08:59 | 2303141 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

iPads aren't too good when you are homeless and can't find a socket to plug them in. Oh wait, we have Starbucks with all those other excessively educated banksters working as Baristas.

Fri, 03/30/2012 - 09:04 | 2303157 junkyardjack
junkyardjack's picture

BusinessWeek had an article a few weeks back, Living in your car isn't just for the homeless.  Everyone's doing it.  Buy an iPad and move out of your apartment.  There's probably an app to locate available outlets for the homeless elite

Fri, 03/30/2012 - 09:24 | 2303221 azzhatter
azzhatter's picture

"affluent" homeless neighborhoods

Fri, 03/30/2012 - 10:27 | 2303394 Oleander
Oleander's picture

A Y membership is cheaper than rent.  They supply hot water and toilet paper. Our Y even has eat cheap nights sponsored by local eateries. You can charge your iPad while relaxing in the lounge. 

Fri, 03/30/2012 - 11:20 | 2303584 JohnKozac
JohnKozac's picture

iPad reception stinks under some bridges they allegedly warn in the instruction sheets that come with they tell me....

Fri, 03/30/2012 - 12:21 | 2303747 Sal34
Sal34's picture

Or just park your car beside a homeless person/wireless router,

Fri, 03/30/2012 - 09:13 | 2303184 Decolat
Decolat's picture

Makes sense with the graph. Apple products typically have a four year shelf life before they break or become obsolete.


Extend the iPads value by using it as a frisbee or cutting board or food when it stops working.

Fri, 03/30/2012 - 10:06 | 2303342 Ralph Spoilsport
Ralph Spoilsport's picture

And your evidence for this broad and sweeping statement is what?

Fri, 03/30/2012 - 10:38 | 2303436 Goner
Goner's picture

Not sure if its evidence but a new iphone gets relased about evey 12-18 months so a full life cycle of 4 years seem long if you ask me. Thats one of the points with the die hard APL people, they cant have last years model. And to have one from 4 years ago (the original iphone 16GB relerased February 5, 2008 would be out of the question

Again, not sure if this is evidence of the product life-cycle but ..

Fri, 03/30/2012 - 19:23 | 2305240 Decolat
Decolat's picture

I've had 2 ipods die on me. They're not designed to last. I did not drop them. They just stopped working. Maybe I'm biased from bad luck.


Either that, of most stupid fucks see the new model and throw the old model in the closet somewhere to never be seen again. Even if it works perfectly. I never see an ipod older than four years old out in public. Do you? 

Fri, 03/30/2012 - 08:48 | 2303106 ekm
ekm's picture

There are to ways to spend money:

- By free will (girl shopping)

- By force (gasoline price)

This is increased spending by force, since with 46% youth unemployment and most of working population about to retire, nobody in his right mind would go out and waste money.

Fri, 03/30/2012 - 08:53 | 2303124 GMadScientist
GMadScientist's picture

a) Free will would imply the possibility of not shopping.

b) Ride a bike.

Even though gasoline is expensive, and vital to the economy in many ways, it's still flexible demand. You want inflexible? Try healthcare.

Fri, 03/30/2012 - 08:58 | 2303139 disabledvet
disabledvet's picture

you mean "try paying for health care." of course "if you take out the word care" it's much easier. that's right: "try paying for health." and suddenly..."we have health on EVERY channel!" And PRESTO! "Healthcare"!

Fri, 03/30/2012 - 09:02 | 2303150 ekm
ekm's picture

I live in Canada. I am a member of an extinct species called "canadian right winger".

If you are just trying to visualize gov medical care, wait unti you taste it. And by the way, it is not health care, it's just medical care. They are brainwashing the US citizens the way canadians and europeans (where I come from) have been brainwashed.

Fri, 03/30/2012 - 09:26 | 2303232 Spastica Rex
Spastica Rex's picture

Sucks about your brainwashing. Maybe you can get some socialized healthcare to fix it?

Fri, 03/30/2012 - 09:40 | 2303270 ekm
ekm's picture

It's not healthcare. What they are talking about is medical care. Health care involves working out, eating well which are far more important than medical care which is when one is already sick.

The brainwashing has ocurred by using the word "healthcare" as if the gov can take care of our bodies. All the law is about is to take care of our sicknesses, not our bodies.

Leftwing brainwashing at its best.

Fri, 03/30/2012 - 10:16 | 2303364 DaveyJones
DaveyJones's picture

Yes, the government has no role to play in regulating our "healthcare." Take for instance food . As you say, "eating well" is an important part of health and I couldn't agree more. Now explain to us Monsanto's influence in both countries' governments along with GMOs , pesticides and other "healthy" things. While you're at it, throw in all the other corporate food heavies and their funny chickens and other oddities.

Funny thing about brainwashing , it knows no political label. In fact, simplifying any subject to a political (now meaningless) label is, in itself, political brainwashing.     

Fri, 03/30/2012 - 11:41 | 2303632 Spastica Rex
Spastica Rex's picture

I was sorry to hear about your recent passing. "Daydream Believer" was a great, happy tune.

Fri, 03/30/2012 - 12:20 | 2303745 DaveyJones
DaveyJones's picture

thank god I spell my name different

Fri, 03/30/2012 - 10:05 | 2303337 GMadScientist
GMadScientist's picture

I'd have them do the basic insurance part and leave the medical care to the doctors (with top-up private insurance for lipo, boob jobs, and boner piils), but that's me.

A shared risk pool for something most everyone needs, but almost always to a degree to which they can't completely guess ahead of time, seems....prudent!

I agree the way medicine is administered after the damage has been done leaves a bit to be desired, but we need to leave something to personal responsibility, don't you think?


Fri, 03/30/2012 - 09:11 | 2303175 withnmeans
withnmeans's picture

Hmm, this maybe the governments underlying ploy to fix healthcare, you know the OBESITY problem.

Raise the gas prices so you have to ride a bike.

Fri, 03/30/2012 - 10:07 | 2303345 GMadScientist
GMadScientist's picture

All while fighting terrorism and potentially generating electrical charge to store.

Get pedaling!

Fri, 03/30/2012 - 13:30 | 2304033 neidermeyer
neidermeyer's picture

Gas is not flexible to me ... without fuel my business stops "dead right there" ... I don't know anyone that joyrides...

Fri, 03/30/2012 - 09:49 | 2303297 Agent P
Agent P's picture

"There are to ways to spend money"

And there are three ways to spell two.

Fri, 03/30/2012 - 10:09 | 2303349 ekm
ekm's picture

I'm at work and blogging when nobody is around me. Pls allow a couple of spelling errors.

Fri, 03/30/2012 - 10:19 | 2303377 Agent P
Agent P's picture

I know how it is.  I wasn't questioning your intelligence...just having a little fun with you. 

Fri, 03/30/2012 - 12:28 | 2303771 ekm
ekm's picture

Keept doing it. Entertainment is important.

Fri, 03/30/2012 - 14:42 | 2304365 Henry Hub
Henry Hub's picture

***I'm at work and blogging***

I know who you are. YOU'RE FIRED

Fri, 03/30/2012 - 08:48 | 2303108 TruthInSunshine
TruthInSunshine's picture



More Americans dip into savings (or more likely, credit cards) to buy food & gasoline (despite many not paying their mortgage or student loan payments).

Good luck retailers who think they can simply close 50 to 120 of their 'big box' stores to ride out the storm.

Fri, 03/30/2012 - 09:39 | 2303267 fuu
fuu's picture

Yet grocery chains and producers are struggling. Except for Ben's neighborhood bodega.

Fri, 03/30/2012 - 09:54 | 2303311 TruthInSunshine
TruthInSunshine's picture


I'm being quite serious. Not only is the consumer deleveraging in any category of consumption that is flexible (i.e. discretionary - see Best Buy or other major retailers), they're actually reducing consumption of inflexible (i.e. non-discretionary) 'things' such as gasoline and groceries (buy driving less, substituting less expensive brands, etc.) and they're still dipping into savings (if they are among the few to actually have significant savings) or borrowing more on their credit cards to pay for this reduced level of consumption of essentials.

The pain train is so obvious, but no will have been privy to "seeing this coming" in a few months or year or so from now.

Fri, 03/30/2012 - 10:22 | 2303381 DaveyJones
DaveyJones's picture

I love CNBCs Onion Orwell spin on this: "Spending Shows Big Jump Even As Income Gains Little"

They go on to say what a great sign that is in consumer confidence.

Where do they get these people?

Fri, 03/30/2012 - 11:10 | 2303558 Chuck Walla
Chuck Walla's picture

Where do they get these people?


Same place they found Obama, at the elite, too expensive and hyper-hyped Ivy Leaguer schools.  If this is the best and brightest, my cat just hacked up a masterpeice.  

Fri, 03/30/2012 - 11:16 | 2303574 DaveyJones
DaveyJones's picture

wow, I thought it was the gutter  Oh wait...

Fri, 03/30/2012 - 10:56 | 2303511 X86BSD
X86BSD's picture

This is what I was going to say. Not all of us are blowing our money on iPads. Sure I'd like one and a new iMac but I'm really starting to struggle just to survive. Food prices have gotten insane IMO. Simple things like 8oz blocks of cheese or a 1lb of butter going for 6-8 dollars. And forget about meat or pork. I'm down to eating ground turkey as my protein since its the cheapest and even it is creeping up to the same nutty price as beef/pork. Gas is already over $4 here in Hartford, CT.
I hate this place but I'm stuck here until the wife's contract is up then I'm hoping we can move back home to our house in Wichita. Kansas is the cheapest place in the union to live still. And we are 2-3 years behind the rest of the country economically. Food and gas are killing me. And I laugh at the insanity of leaving those two categories out of the inflation index the fed uses. How the hell do you take out the two most expensive costs for every single person alive from your inflation calculation?!?! This entire system is a fucking fraud. I cannot believe its lasted this long. The entire fraud can't implode fast enough as far as I'm concerned.

Fri, 03/30/2012 - 11:05 | 2303543 DaveyJones
DaveyJones's picture




if you don't have the land

cut a deal with someone who does

Fri, 03/30/2012 - 11:23 | 2303592 Silveramada
Silveramada's picture

man, not only 2 more expensive cat. but also the one you need every day!!! real inflation is 7-10% hands down.

Fri, 03/30/2012 - 11:48 | 2303652 fuu
fuu's picture

You have to wonder where all the spending is when a national chain like SVU is making new 52 week lows. $5.84 now, down 50% from the April 2011 high.

Fri, 03/30/2012 - 08:55 | 2303114 MFL8240
MFL8240's picture

Hoodwinked by phony stock markets created by a courrpt banking cartel to create the illusion of a "recovery" which does not exist, the stupid over indebted American buyers continue to buy foreign made goods and line the pockets of the Walton Family as the workers of the world use their new found wealth to buy Gold and Silver.  With this I hear the mantra that Americans best days are ahead of us, yet we manufacture nothing and our courrpt politicians have the country addicted to foreign energy making a manufacturing revolution (which is real welath) an impossibility.  I hope that is so, I love my country but I am afraid that a collapse needs to wake the country up to reality before such a transition will occur.

Fri, 03/30/2012 - 09:12 | 2303181 kridkrid
kridkrid's picture

Collapse will happen... it's not that it needs to as much as it is destined to.  The system of credit/money can only exist for so long before the cost of maintaining the debt burden overwhelms the productive economy.  There are all sorts of tricks along the way to push the inevitable collapse further out, but we are rapidly approaching the end, I believe.  2 months... 2 years... perhaps longer.  I didn't think we'd see 2012 back in 2008, so clearly this can be prolonged longer than I originally thought, but there is no way out... that much is a certainty.

The questions to answer:  How bleak will things be during the transition from this thing to the next?  Is it Mad Max or something else?  Is it 30 years of war like WWI-WWII with something new on the other side?  How much worse will our coming greater depression be than the great depression.  What will we use as money during the transition.  Who will win American Idol.  Stuff like that, mostly.

Fri, 03/30/2012 - 09:21 | 2303212 Divided States ...
Divided States of America's picture

I dont know about you but everywhere I see there are Asians of all sorts (Koreans, Chinese, Japanese) and they are shopping to the gills here like its Xmas in March. They are the ones boosting retail sales in my opinion...but of course there are those sheeples who has to own the next Apple product when it comes out.

Fri, 03/30/2012 - 09:28 | 2303237 azzhatter
azzhatter's picture

go to miami and see the south americans loading up on stuff for their return trips. US has become an outlet mall

Fri, 03/30/2012 - 09:36 | 2303260 Spastica Rex
Spastica Rex's picture

The Vietamese emigrants where I live don't shop much. Maybe they do, how would I know? I don't shop at all.

Fri, 03/30/2012 - 11:24 | 2303585 Normalcy Bias
Normalcy Bias's picture

They're busy ruling their mani/pedi empire with an iron fist...

Fri, 03/30/2012 - 11:17 | 2303577 Chuck Walla
Chuck Walla's picture

I dont know about you but everywhere I see there are Asians of all sorts (Koreans, Chinese, Japanese) and they are shopping to the gills here like its Xmas in March. They are the ones boosting retail sales in my opinion...but of course there are those sheeples who has to own the next Apple product when it comes out.


In Weimar, 1923, people came from all over Europe to snatch up the bargains.  There are stories of Americans trying to pay for lavish dinners with a five dollar bill and the restaurants not having enough paper Marks on hand to make change such was the inflation.  People could go out on the town for a few dollars and come home with change,

Fri, 03/30/2012 - 12:53 | 2303847 Bansters-in-my-...
Bansters-in-my- feces's picture

@ Chuck Walla.

Your comment" s are not being allowed to be voted on.

Your arrows are frozen on two comments and i am not allowed to get an arrow to go up or down.

You been spanked.

Fri, 03/30/2012 - 16:06 | 2304657 TruthInSunshine
TruthInSunshine's picture

It's because he began with italics.

If one wants to begin with italics, but still wants to be able to be up or down voted, just put a - or . or other non-italicized symbol in the first spot.


Fri, 03/30/2012 - 08:51 | 2303119 GMadScientist
GMadScientist's picture


Fri, 03/30/2012 - 08:58 | 2303136 slaughterer
slaughterer's picture

Congratulations, you have earned another 500 iCreditz on your next Apple Store purchase.  Please contact your Apple products consumer representative at the Apple iBank right away to learn how to claim your iCreditz.

Fri, 03/30/2012 - 09:41 | 2303276 VisualCSharp
VisualCSharp's picture

'i' is the new 'Mc', as in McDonald's.

Fri, 03/30/2012 - 10:08 | 2303348 GMadScientist
GMadScientist's picture

And the best part about company scrip is I never have to travel to more than one store!


Fri, 03/30/2012 - 08:52 | 2303120 BeerBrewer09
BeerBrewer09's picture

I'm so glad I found this site.


Let the money printing continue!!!

Fri, 03/30/2012 - 09:00 | 2303145 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

BB, I dig your hop moniker. Are you a homebrewer or a pro?

Fri, 03/30/2012 - 09:08 | 2303169 BeerBrewer09
BeerBrewer09's picture

Homebrewer looking to turn pro. I'm in the midst of starting a contract brewery.

Fri, 03/30/2012 - 09:39 | 2303268 Kaiser Sousa
Kaiser Sousa's picture

Trade n Silver?
Hollar at a player.....

Fri, 03/30/2012 - 09:56 | 2303320 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I have been homebrewing for over a decade. Never had the nerve to go pro. I wish you the best of luck!

Fri, 03/30/2012 - 11:11 | 2303560 DaveyJones
DaveyJones's picture

second that vote

Fri, 03/30/2012 - 08:55 | 2303128 JaylP6
JaylP6's picture

Stock market bottom April 2012  -

Fri, 03/30/2012 - 08:58 | 2303138 TruthInSunshine
TruthInSunshine's picture

I'm all for uncensored speech on ZH, but the douchebag above has been a very short term member who has now posted the same 5 word post with lame link attached in 5 threads.

IOW, kill the spammers, ZH.

Fri, 03/30/2012 - 09:07 | 2303166 ekm
ekm's picture

Free speech is free speech.

Ignore him but let him speak.

Fri, 03/30/2012 - 09:13 | 2303185 ihedgemyhedges
ihedgemyhedges's picture

"Ignore it but let it speak."

There, fixed it for ya.  Never call a bot "him"......

Fri, 03/30/2012 - 09:33 | 2303254 Dr. No
Dr. No's picture

Congress has made no law abridging the spammer speech on this site. However if Tyler, who pays for this site, chooses to abridge it, I believe he has the right to do so.

Fri, 03/30/2012 - 08:56 | 2303131 lizzy36
lizzy36's picture

Isn't is ironic.......

The Adminstration and Bernanke, win.

Their narrative has been "we will change our consumptive patterns one we return to sustainable growth". Of course since "sustianable growth" is undefined, and likely last occured in the US at some period in the 1990's, there will neve be a change to consumptive patterns.

Of course, there will be cheer for this number. And most don't believe in sustainability. Most just waiting for the next hit of heroin and the next 10 S&P points.

Fri, 03/30/2012 - 08:58 | 2303133 Dr. Engali
Dr. Engali's picture

Yeah buying gas and food is a bitch.

Fri, 03/30/2012 - 09:38 | 2303264 Spastica Rex
Spastica Rex's picture

And then you die.

Fri, 03/30/2012 - 11:06 | 2303550 DaveyJones
DaveyJones's picture

if you think it is now....

Fri, 03/30/2012 - 08:57 | 2303134 101 years and c...
101 years and counting's picture

forgive if im wrong here, but dont banks need deposits so they can commingle the cash and buy bad euro debt and stocks?  but if they save, then aapl doesnt go up $10 everyday and stocks crash.  quite the dilemma for an insolvent world.

Fri, 03/30/2012 - 09:29 | 2303240 Vince Clortho
Vince Clortho's picture

With you on the first point, but there is no relationship between debt slave savings and Apple price going up.  

There is a direct relationship with CTRL-P and Apple price rising.

Fri, 03/30/2012 - 08:57 | 2303135 beaker
beaker's picture

Why doesn't Obama redistribute Apple's wealth? He could make a real serious speech about it with that annoyed look that he gets.

Fri, 03/30/2012 - 09:12 | 2303179 Dr. No
Dr. No's picture

Political suicide. Apple will state they have no money left to develop iPad 4. This is why he is after big oil. Easy target.

Fri, 03/30/2012 - 09:33 | 2303251 XitSam
XitSam's picture

Because Apple supports Obama. Duh.

Fri, 03/30/2012 - 10:02 | 2303330 Agent P
Agent P's picture

From the reports I've read/heard over the past two days, it appears there's a movement brewing to redistribute Apple's wealth to a bunch of Chinese factory workers, which is really just a ploy by US labor to make Chinese labor less price competitive.  Since US labor and Obama row the same boat, I'd say you're already getting what you're asking for.

Fri, 03/30/2012 - 09:01 | 2303146 vote_libertaria...
vote_libertarian_party's picture

As a reminder this 'consumer spending' includes gvt programs too.  Somebody detailed this previously.  Housing credits, etc..

Fri, 03/30/2012 - 09:02 | 2303151 The Axe
The Axe's picture

A world were numbers are...well useless.....

Fri, 03/30/2012 - 09:03 | 2303153 Manbarepig
Manbarepig's picture

This is tax refund check anticipation spending...

Fri, 03/30/2012 - 09:03 | 2303154 Madcow
Madcow's picture

equity markt redemptions and outflows being used to fund consumption, debt service and taxes

Fri, 03/30/2012 - 09:04 | 2303155 Gary Busey
Gary Busey's picture

Could tax returns account for some of the increase in spending instead of being purely credit based?

Fri, 03/30/2012 - 09:25 | 2303224 SheepDog-One
SheepDog-One's picture

Well why trust any of these numbers and data in the first place? 

Fri, 03/30/2012 - 09:06 | 2303161 EmileLargo
EmileLargo's picture

I think once again there is some kind of crisis coming in the short term (putting aside the obvious certainty of the long term collapse of paper currency). The high oil prices are creating all sorts of problems everywhere. In the UK, the consumers are really getting hit hard and are completely tapped out. In Europe, drivers are paying record high prices in Euros for petrol. India is on the verge of a currency crisis with the high oil prices hemorrhaging their Forex reserves. And of course, US consumers are getting a pasting at the pump.

All this means one thing in the short term: high demand for US Dollars. Due to the perversity of the global trading system, high oil prices means that every country on earth which is a net consumer of oil has to pay more in US Dollars for their oil imports. Massive dollar demand eventually leads to a liquidity squeeze which in turn will cause another credit event somewhere: may be a bank, may be a country, we don't know this today.

Consistent with this thesis, I converted all my saved cash in Pounds Sterling into US Dollars earlier this week. In the short run, I cannot think of what else one can do. The markets are so irrational that after the latest announcement that the UK's economy SHRANK 0.4 per cent in Q4 2011 and another 0.1 per cent in Q1 2012, the Pound rallied to 1.60 against the Dollar (I sold all my Sterling at 1.5855). Of course one can buy more gold. But if you have a third of your net worth in it, you want to keep some gun powder dry in case there is another panic. And in a panic, I think the Dollar will do better than any other currency. Long term, you have to get out of the Dollar as it will go the way of toilet paper.

Time will tell if I got the above completely wrong.       

Fri, 03/30/2012 - 09:12 | 2303178 s2man
s2man's picture

Savings?!  We don't need no stinking savings!

Fri, 03/30/2012 - 09:12 | 2303180 Kaiser Sousa
Kaiser Sousa's picture

"Everything' s coming up roses..."

Fri, 03/30/2012 - 09:14 | 2303188 Jason T
Jason T's picture

Look at this chart of gasoline sales by refinaries ..

Fri, 03/30/2012 - 09:15 | 2303193 Jason T
Jason T's picture

Goes back to levels from 1984!  

Fri, 03/30/2012 - 09:16 | 2303196 red_pill_rash
red_pill_rash's picture

Why hang onto your fiat and let the pigdemons take 10% of it every year thru inflation (at least).

Putting an office in your house.....or buying pms is better than that.

Fri, 03/30/2012 - 09:18 | 2303199 Seasmoke
Seasmoke's picture

when paying the credit card bill is a smarter move than paying the mortgage, we have crossed the tipping point and savings is meaningless

Fri, 03/30/2012 - 09:18 | 2303205 yogibear
yogibear's picture

Bernanke and the Fed clearly indicated they want everyone to spend, not save with their actions. This includes the US government.

Bernanke's own son carries $400,000 in debt from college and medical school.  This should indicate to people around the world that Bernanke intends on devaluing the dollar much further, surprising everyone.

Watch out everyone, Bernanke's big dollar devaluation is yet to come!


Fri, 03/30/2012 - 09:18 | 2303206 GCT
GCT's picture

Ahh come one they are just spending their tax returns and adding some savings for their new Ipads and toys.  Now they can finally afford to fill up their fuel tanks and buy some decent food with their returns.

Fri, 03/30/2012 - 09:23 | 2303218 SheepDog-One
SheepDog-One's picture

Theres something wrong here, I dont know anyone around me spending hand over fist on shopping sprees.

I think first theres nothing TO save, second spending is all higher prices. $5 gas is no joke.

Fri, 03/30/2012 - 09:31 | 2303248 dwdollar
dwdollar's picture

That's exactly right.

Fri, 03/30/2012 - 10:33 | 2303415 slewie the pi-rat
slewie the pi-rat's picture

what's "wrong"?

well, the graph shows the savings rate = 3.6% and has declined a little

nothing about prices, wages, crashes, ipads, gas, oil, or even "savings plunging"

nothing from that chart;  all that stuff is from somewhere/somebody else;  possibly from someone wirth an agenda...

saving are not plungingl  they are growing at a rate of 3.6%

that is what the chart sez;  and that the rate of savings is decreasing

keep drinking, tyler!  this is funny as a fuking crutch!

Fri, 03/30/2012 - 09:25 | 2303228 monopoly
monopoly's picture

This is so sad. But I think that a lot of the spending is just people trying to get by. Food, gas, heat, the basics. Remember, for those working most have not had real pay increases or benefit increases, if anything, it has all been lowered over the months. True, some just spend because that 21% interest rate on a credit card they should not have qualified for is no big deal. And they need that 3rd I Pad.

But many are just "tapped out" and have no choice. The moral fiber and fabric that was once the mainstay of this country is moving in a direction that will move us from a position of strength, freedom and prosperity into a crony semi capitalist nation of the few who have too much and the many who do not have enough. And the young will suffer and pay the price of our absurd greed, fraud, deceit and stealing. While I hold out hope for this once great nation, we are preparing for what will probably be the outcome of all the financial and moral destruction wrought upon us. 

Find one like Thomas Jefferson and "hope" may be for real, not the "change you can believe in" that was nothing more than one person longing for power.

Fri, 03/30/2012 - 09:26 | 2303231 SheepDog-One
SheepDog-One's picture

2008....AH what a fine year it was...

Fri, 03/30/2012 - 09:29 | 2303242 rsnoble
rsnoble's picture

Yes and this is considered good news that consumers are spending and have no savings?  This whole system is sick.  Hardly anyone in this country is going to be able to retire.  When we're 70 and social security has been done away with or engulfed in the black hole(stock market) people are going to be wondering how nice it would have been to have the $250 a month back that they sent to Apple.  Most of us don't need that bullshit.  If you can afford it fine, if not well don't say I didn't warn you.

I was also a dumbass, took me up till I was almost 40 to grow a fkn brain of course going from $40hr to nothing I can't exactly plan on saving much anytime soon. My house is paid off and I have no credit card debt but I suspect that will just be one huge prize down the road for some asshole lawyer if something gets fouled up. 

Speaking of which.........North Dakota is leading the charge to outlaw property taxes. That seriously needs to happen. 

I mostly work for myself, buying and refurbishing equipment of all sorts.  People around here probably just think I drink all the time lol. Mainly cause I like to get on here when im drunk and raise hell.  Fact of the matter I gotta go pack some stuff, work in the shop till 5, then drive 50 miles to pick stuff up....hell I may not be done till 9pm tonight. It's rough.

Fri, 03/30/2012 - 13:25 | 2304003 robertocarlos
robertocarlos's picture

Property tax is the only tax that should be levied. The people own the land.

Fri, 03/30/2012 - 09:37 | 2303261 CuriousPasserby
CuriousPasserby's picture

I'm depleting my savings to buy physical.

Fri, 03/30/2012 - 09:43 | 2303279 Rathmullan
Rathmullan's picture

Hard to ween consumers off of cyclicality. But "ween" they will. This is a great signal for shorting.

Fri, 03/30/2012 - 09:45 | 2303280 gaoptimize
gaoptimize's picture

Is it possible people realize sitting on fiat inflating away will do them no good when SHTF?  We keep a foul weather cussion in the bank, but have been drawing some of that down to prep for SHTF.  Is there any internals to show what people are spending it on?  I know some of it has been going to guns and ammo ( ) and higher gas.  Maybe PMs?

Fri, 03/30/2012 - 10:19 | 2303305 slewie the pi-rat
slewie the pi-rat's picture


savings are growing, but at a lower rate

The End

Fri, 03/30/2012 - 09:55 | 2303315 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

That chart looks like a complacency curve.

Fri, 03/30/2012 - 10:18 | 2303374 buchesky
buchesky's picture

Apple made a brilliant move with the release of its new iPad.  They effectively reduced their price without overtly saying so.  They released an iPad 3 that is not substantially different from #2.  As a result, they can cut the price on #2, while still getting significant scale in production of both #2 and #3 because the frame and most of the parts are the same. But on the upside they have generated greater sales of the high-end version (#3) without investing a huge amount in an upgrade.  As much as people want to hate Apple on this site, they clearly have a very good understanding of the current market.

Fri, 03/30/2012 - 10:23 | 2303382 Snakeeyes
Snakeeyes's picture

Watch for Obama to issue an Executive Order to ban savings. Although The Fed has kind of done that already.

Fri, 03/30/2012 - 10:25 | 2303391 LouisDega
LouisDega's picture

Made me look, Made me look...

Fri, 03/30/2012 - 10:44 | 2303458 Bansters-in-my-...
Bansters-in-my- feces's picture

No one said Americans are too bright.

Look what they allow the Federal Reserve to call themselves,and to run the countries monetary policy.

And the ones that have saving ,don't really,they owe it somewhere else.

Fri, 03/30/2012 - 10:56 | 2303512 lenitivelea
lenitivelea's picture

I had no idea the savings rate was that low. No idea at all. 

But hey, you lose a bit of your faith in humanity every day. 

Fri, 03/30/2012 - 11:23 | 2303569 bobola
bobola's picture

In past public speaking events, Bernanke has always talked about consumer spending as an economic driver.

Saving has to decline for that to work.

There is no other option.

Call it a Frankenstien economy, but that's what we have become.

Rode a bike to work today.  3rd time this week.  Sorry, gas station owners.  

Bike Club...!!!!

Fri, 03/30/2012 - 13:16 | 2303931 robertocarlos
robertocarlos's picture

I took a break from paying down my debt and I bought a tonne of junk this winter. The bank got upset and increased my minimum payment from zero to 150 bucks. The bank statement indicates it will take me 11 years to pay off my debt.

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