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How does GDP "grow" then?
How does GDP "grow" then?
Well, the foreclosure sign business is booming.
BLS math. Voila'.
I must be an idiot, because I too don't get this. On one hand, we're told the economy is weak (dying) because people aren't spending, but then you see stats like this that say people are blowing through their dry powder as fast as they can. Which is it?
If people are already spending at peak, then this slow downwards crawl is probably a best case scenario, and worse is coming.
If people are paying down debt, then we have a contraction as we move to greater financial stability.
It can only be one... which is it? I believe it's the first, in which case... look out below!
The downward arrows business has been blowing out estimates
Resume business is booming as well.
People save for a rainy day...
... and these days, under our fascist dictators, its p*ssing it down daily directly on to every citizen.
Spend your money before it is worthless - it is earning 0% in the bank anyway. Bennie will be printing trillions soon enough anyway.
If you replace "spend your money" with "convert your money to something that holds value" then I agree with you.
Agreed. 10% of my income goes to "savings". But it gets converted to items of value as quickly as possible. Hence, I help drive the statistics of lower savings and higher spending.
Considering the 11% inflation rate (ref. shadow stats), buying just about anything you will need in the future, now, will get you one of the best returns around.
There is savings and then there is SAVINGS - GOLD, bitchez!
Gold is about to make new lows along with the rest of the market.
Well that does explain how the consumer was the biggest component in that surge in GDP 0_o
Wait til it hits the near zero, like in 2005.
On another note, how the fuck did Chevron miss revenues so much?
Barack Obama is a perfect example of the stupidity in America, this recent report shows that nothing has changed.
Not that I disagree, but it's not exactly as if McCain/Palin was such a promising prospect.
Therefore, BHO is not stupid because Palin is stupid too. What?
I would worry more about Palin if she was President or even had a reasonable chance to be President. You are watching too much MSM.
Way to go reading into what I clearly didn't say.
The choice was between Obama and McCain, that much is a fact.
As for your OMG YOU WATCH TOO MUCH MSM, what the fuck is that all about? I just stated the alternative wasn't exactly a grand prospect either.
The party picked that ticket because they didn't want anything to do with this shit sandwich thru 2012. Now they are clearly picking Mitt.
Take your pick, it's a shit sandwich with different condiments.
Buying phizz with worthless fiat??
Getting harder to buy that new iPhone, that is for sure.
No iPhone for me. Can't get past the iBroke app.
Well that explains the GDP spending component...people are draining their savings. Could possibly be a very ugly holiday season.
Ho Fuckin Ho bitchez!
Paying down their credit cards so they can charge them right back up with XBOX games and My Little Ponies and 3D HDTV glasses
That is awesome.
Win for Bernanke.
Lets get the music going like is is 2006. It ended so well, lets make sure the 2nd verse is same as the first.
Ol' Ben wanted to push people into risky assets to get any return... I guess food and rent are pretty risky.
People have been buying trinkets. But at the same time, as commodity prices have spiked and wages declined, they're simple paying more to sustain the every day. BTFD bytches.
I've been buying 1 oz trinkets.
+1 FMBoy... Pent up consumer demand for PMs...
Ironic that stacking PMs would qualify as "spending"...
Notice how the Fed does nothing but blow bubbles, and they pop faster and faster...
Not that anyone on CNBC would acknowledge such a thing.
Cash out refis?
But NPR says no double dip exists because of the of the GDP increase.
That's how out of touch the economists are. The Fed believes numbers and doesn't listen to people, so price increases are good (a sign of consumer strength).
Just walk down the street and ask people, "Do you feel better now that GDP is improving?" When the response is, "I could give a flying $%^!" - then ask, "What do you feel about gas, food, and costs overall?" It's hard to get people to shut up after that.
Main Street can answer the economic questions and is one of the best leading indicators. Next question, "How's the economy doing?" It's that simple.
The Fed's conjurings don't fool anybody, except those that want to be 'fooled' to justify throwing good money after bad on Ponzi Street..
(we all know this - just wanted to cast a miniscule vote calling bullshit to the computers culling sites for sentiment)
Hoarding PMs, the most sincere form of saving, is probably not even taken into account ! Monedas 2011 Comedy Jihad World Tour
In the near future: Everything you WANT will be really cheap, but everything you NEED - food/warmth/medicine/water - will be so expensive you won't be able to buy anything you merely want..
Denninger just gave the exact same analysis. The consumer is tapped out and now using what little savings they have left. With savings rates back to 2007 levels it is going to be a weak Holiday season. Add another 2 million falling off the dolls in the next three months and I predict (I know, Hugh said never try and predict the future) GDP goes negative first quarter of 2012.
There is absolutely no incentive for people to save. The interest rate provided to savers is so miniscule that after inflation....you're losing money allowing it to sit in a bank. The Bernank has made sure that the savings rate will go to zero because of ZIRP. Additionally, people are facing higher costs for food and fuel and their real wages have actually decreased on an average of 9% over the last 10 years. People have to tap their savings to make up the difference.....they have to put more on their credit card because until this high leveraged system is flattened....only the 1% are making out and everyone else is screwed with the game stacked against them.
Not just a US phenomena; here in the UK, the CPI runs @ 5.2%, yet standard savings accounts yield 0.25% or thereabouts, which obviously are taxed.
The thrifty are skinned, and will continue to be until there are only two classes left in society.
Are you saying this is a good thing? This is the dumbest thing the Bernanke can do! Tell Americans to spend all of their savings and get deeper in debt! That is a sure fire way to crash the ecomony because there are not enough credit worthy people out there!
People should be doing the exact opposite of what the Bernank wants (Which is continue saving even if you get paid no interest) because savings is STILL capital. Credit is still debt that needs to be paid back with interest!
You were doing so well till you included ".......only the 1% are making out and everyone else is screwed with the game stacked against them"
I am not against people making money....and this is not a class warfare statement. Generally, the people with more resources, i.e. $1 miiion or more, have access to better income producing opportunites than a person with $1,000 whose only option is a bank or credit uniion. With the Central Bank (Fed) pushing people out of saving through making the act of saving worthless and the price of commodities and finisihed consumables escalating, it leaves the majority of people with limited funds out in the cold with a depreciating asset, FRNs. That's all I was trying to say, but I appreciate that it came off that way. The most objective statement might be "Most people, potentially 99%, are screwed because saving accounts provide negative interest." :-}
This isnt news to me, the young generation simply doesn't save (ironic, as i am part of that Gen). It boggles my mind how, every so often, a tenant asks for a week or 2 delay's on this month's rent, simply because his paycheck hasn't cleared yet.
These people literally live paycheck to paycheck. A scary thought, if i was ever in that unfortunate position.
Oh, but these same folk seem to eat out at every occassion, and of course have that flatscreen on that 120mo/0% down financing plan from Best Buy.
. . . one two three four . . . nah nah nah nah nah nah live for today . . .
What is the point of saving? Save for a home? That market crashed.
Place it into a 401k? That Crashed too. I saved for years for nothing.
Boat, hoes, guns and gold.
I agree that it would be in the individuals' best interest to save more and eat out less. However, in reality we have built an economy that is dependent upon people "spending more". The paradox of thrift is rearing its head here, if your tenants in unit 1 stop eating out to save money and pay rent, your tenants in unit 2 who work at Olive Garden and Best Buy are going to start asking for extensions next. We are truly fucked.
But, but, but...I thought folks were deleveraging????
I'm doing that, too. Golly, I'm on all the consumer statistical charts. ;-)
Surely the average American is not prep'ing, like me and many others here (co-mayhem-ugh). What are they doing?
And this is news? When at the lower end of the financial system, those that actually earn money and use if for living, have no other choice but to exhaust savings. Seems this can't last too long.
Only as long as the redistribution and papering over of "debt forgiveness" can last. Which ain't much longer...
Well, the GDP numbers will probably be revised to negative in 1-3 months, just like it was revised downward drastically in the first quarter. But in my opinion, the only thing that was keeping our economy afloat is that people stopped paying their mortgages since they new they were going to loose their homes anyway. This gave them more buying power. But now the buying power is coming from savings. It doesn't look good. With homes lost and savings exhausted, and if banks tighten credit further, this is a recipe for disaster.
Whilst most people on Zerohedge advocate gold and silver for maintaining their purchase power whilst the printing presses go into overdrive, what are you thoughts on illegal drugs?
I'm starting to think having a healthy stockpile of cannabis might also be useful and even legal drugs which people are addicted to. Coffee, tea, sugar, cigarettes, etc?
Any thoughts? My only concern is how long they'll last... especially with me around.
Are there any studies to show what happens to the prices of drugs in the black market due to inflation/hyperinflation?
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