The Conference Board said on Tuesday its index measuring consumer sentiment tumbled to 38.0 in October, down from 61.4 in September and the lowest reading since the index was first published back in 1967.
The weight of the world is on the back of the US consumer. The US economy makes up 25% of the global economic activity, yet 72% of the US economy is based on consumption. Now that the US consumer confidence has dived to a record low, who is going to buy the products that the world is producing? If consumers are broke because of plunging home values and scared to dead from the severe financial crisis while jobs cuts are increasing in number and speed, then who is going to stop a global depression gaining momentum?
Two weeks ago the Dow rose 800 points, but within a week it was lower than the high that day. Today it rose 900 points. What do you think it will so at the end of next week?
The government is in more of a panic than investors. Forcing private banks to selling ownership to the government to gain more control over the banks and force them to lend money to consumers against their better judgment. The Fed government wants it both ways. They say the greedy banks sold mortgages to people that couldn’t afford homes, yet they are forcing the banks to hand out loans to the same people that cannot afford the pay back their home loans. The government is in over their head. They are throwing good money after bad. The marry-go ride is over, but they refuse to get off the horse.
The Government Is Perpetuating the Problem
Then there is Obama's plans to expand government into the role of complete control of production and job creation. Just yesterday he said he will return the economy to prosperity. What planet is he living on? We are facing a global recession and very possibly an inflationary depression. It is virtually impossible for Obama to deliver what he has committed to. Yet, the poor have taken the bait of his tax plan language to ‘spread the wealth’, with realizing their taxes will increase when Obama does not renew the Bush tax cuts. The poor don't realize they are falling for a trap. The plan do distribute the wealth will cost them their freedoms and enslave them to the government. The only jobs in an Obama economy will be government jobs, funded with printed money and taxes back to the government. America would be working harder for less.
Obama has done an excellent job marketing ‘victim mentality’ in order to gain the support of the growing poor and middle class in his attempt to win the presidency, when in fact, ‘victim mentality’ is at the center of the cultural trend that caused the economic problems that we are in.
Today’s culture of consumerism has led many people into the bad spending habits that have resulted in the financial troubles they are in. The government is perpetuating the problem by forcing banks to lend more money and Obama is using ‘victim mentality’ to gain more and more control over the economy, while both are plundering the wealth of the nation and the savings of the world. If we are victims of anything, we are victims of our own government.
Consumer confidence needs to fall, savings needs to increase, banks need to stop lending to people that cannot pay for them and the economy needs a recession to clear out all the bad loans that the government has helped create over the last few decades.