There is a looming US Retail implosion on the horizon and a complete re-think
of the foundation of a 70% US Consumption Economy is urgently required. For
thirty years analysts have predicted the demise of the US consumer. They were
so consistently wrong that the mantra "Don't Bet Against the US Consumer" became
a staple of investor wisdom, similar in reliability to "Don't Fight the Fed!".
The US Consumer as the engine of global growth has powering global credit
creation and expansion as a result of the corresponding growth in US deficits
. Now at 70% of the US economy, as compared to 50-55% for other developed economies
and less than 35% for emerging economies, the question is no longer a matter
of is it sustainable, but rather what will be the fallout now the inevitable
has finally arrived?
It is clear the US consumer is tapped out a result of the US middle class
being 'gutted' with job lose, low salaries, exploding healthcare & educations
costs and pensions now an endangered species. However, our Monetary, Fiscal
and Public Policies are only making matters worse.
Charles Hugh Smith spells out his concept of "DeGROWTH" and its key characteristics
which challenges our consumer centric, materialistic notions for sustainable
growth.
Whether you agree with Charles or not, it is important to see the road we
are presently on is unsustainable and an urgent 're-think' is required.
Spending $Trillions the US does not have to foster growth through consumption,
may be better spent on a more productive public-fiscal-monetary policy direction.
Video with Charles Hugh Smith & Gordon T Long
25 Minutes, 25 Slides
