February 2014 – ECONOMY – One week ago we remarked that in the month of December, in order to fund their purchases of Holiday gifts and year-end trinkets, Americans burned through a whopping $46 billion in personal savings, in the process taking the US saving rate down to a one year low of 3.9% and dropping. Today, we got the credit side of the ledger with the December consumer credit report, in which we learned that in addition to the now traditional draw of Car and Student loans, which came out to $13.8 billion, or exactly in line with the 12 month average draw, sending the total notional to a record $2.24 trillion, it was revolving credit, i.e., credit cards, which saw a substantial $5 billion increase in outstandings – the most since May 2013 – bringing total revolving credit to $862 billion if still far below the nearly $1.1 trillion in student loans outstanding. So just as the US consumer was tapped out, and saw their personal income remain unchanged from November and real disposable income cratered, as a result having to draw down on their savings, the remainder of all purchases was funded through the use of credit cards, which may or may not be repaid in 2014. There is always hope that this time will be different and incomes finally pick up. –Zero Hedge
Prosperity is just around the corner: The wheels of the economy are creaking under the strain of a system that is too over-bloated on credit and too short on low-cost high-quality merchandise goods that could be manufactured domestically to employ the masses. Instead; once again, consumers are prodded into raiding their savings and running up high credit cards bills to keep an economy running that has long exhausted its natural energy, creativity, means, and vitality to be relevant and self-sustaining in the 21st century.