What They Are Telling You about the Economy Improving: Don’t Believe Them
US presidential elections are close. It has become crystal clear that Romney and Obama will be final contenders. Election fever is already on high and voters might see high claims of US shining in the coming elections. Normally politicians like to paint rosy picture for their voters in such times. Addition to that U.S. consumer credit jumped in March 2012 impressively. Be prepared to hear the usual half expert economists and vote-hungry politicians say, “Hey see, our consumer spending and consumer confidence is improving.”
But though numbers are great revealers themselves, number can give us great insights in any matter especially financial matters. Numbers are crying from the rooftop that what is in platter of 2012 and the picture is defiantly not rosy.
Analysts think that increase in US consumer credit is just because of student loans and car loans. The increase has nothing to do with high consumer spending.
The million dollar question is why more and more people are opting for education loan. The answer lies in high unemployment rate at 13.2% in U.S. economy. People who are out of their jobs are going to schools for some qualification addition so it will become easier for them to find jobs. It doesn’t show people’s faith in so called economy improving claims.
Making scenario worst, Congress is giving serious thought to increase interest rates dramatically after June. People know this and they are just racing with time to get education loan faster.
As for as car loans are concerned, financial company Nomura Group just released a research note stating that the average age of cars on the road in the U.S. is more than 10 years old—the oldest on record!
Connecticut-based LIMRA Research conducted a survey almost half of American population could not afford to save for their retirement. It’s shocker. 56% people participated in the survey are in between the age group are 18 to 34. It is shocking that in their most productive years of life they can not afford to spend on their pension plan.
It means they have to work even during their retirement to earn their bread and butter. It’s called retirement crisis in economics. Only an insane can claim that this is consumer confidence in our economy.
So don’t believe in tall claims of consumer confidence and customer credit. Signs mentioned earlier shows that we are traveling to opposite side. It’s called consumer’s distress.
2012 has been considered as doomsday year by many. Don’t know about doomsday theories but on financial front this year might be doomsday year for US economy and Eurozone. Creating illusions like consumer confidence won’t help us.
Recession is entering in the US economy slowly. Experts are thumping their brains about thinking it out if it coming across the Atlantic from recession-ridden Europe or across the Pacific from economically slowing China.
How will the balance of 2012 go? Terrible. If the economic statistics are any indication, consumer confidence seems to be an illusion. As I have been predicting, the economy will deteriorate as we move along in 2012.
A recession is sailing into America.
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