Consumer Spending is Down Even with Lower Interest Rates

Rodney Johnson | Thursday, September 13, 2012 >>

For years there have been conspiracy theories about NASA. Did they really send men to the moon? Is the money for NASA funneled to some black ops group that does hush-hush things around the world?

Well, you don’t have to wonder anymore. I’ve figured out the truth about NASA. The space agency is really just a division of the Federal Reserve.

After talking up the economy, forcing interest rates through zero into true negative numbers, and printing dollars with abandon, the Fed has finally thrown its Hail Mary pass. It bankrolled the Mars Rover in a last ditch attempt to find a new export market for the U.S… and it’s desperately hoping that Martians want iPads and will pay for them in precious metals.

OK… maybe that’s not true… but it might as well be.

Of course, this desperate need to find worry-free consumers willing to spend with abandon is not limited to the U.S.

China is slowing down. Its manufacturing index is flashing contraction.

The euro zone is in recession.

Japanese exports are off, exposing the worst trade deficit of recent times. And here at home the trajectory is lower.


As exports slow down there is only one way to keep growth on track – domestic consumption. But what if those pesky consumers don’t do their job? What if they try to save instead of spend? Well, that’s when central banks give them a nudge.

This is where things stand today. The largest markets in the world are slowing down in concert. Each nation or economic zone is trying desperately to ramp up greater exports to spur growth, but of course their normal export clients are slowing as well. So each market has its central bank taking action to spur local consumption. They are peddling lower interest rates, lower reserve rates, easier credit, expansion of money supply, you name it. And it’s not working.

This is where we get yet another failed policy initiative. This is where consumers and conservative investors get to find out how they will be punished for the umpteenth time for wanting to save for their future.

This is where it pays to be smart.

In the face of this situation we have to remain diligent, we have to stay focused on what is really going on in the world.

This global economic stall calls for building a personal war chest, creating streams of income and being ready to play markets to the downside.

This is NOT the time to buy the hype of “good times to come.” Unless, of course, you’re certain Martians are patiently biding their time before they claim a seat in the G20.


P.S. Are you a supporter of central banks’ efforts to stimulate the world economy out of the chasm it’s sliding into? Do you think there’s any way they can succeed in their efforts? Let us know by liking us on Facebook and then posting a comment to our timeline. Start here.

Ahead of the Curve with Adam O’Dell

Consumer Spending is Low Yet Dow Jones is High

Today’s analysis easily fits our “what planet are we on?!” theme. As Rodney points out, the economic picture is dim. China’s output is slowing. Europe is on life support. Yada yada…

Yet, major stock market indices are hitting new highs. Both the Dow Jones Industrial Average…


Rodney Johnson

Rodney’s investment focus tends to be geared towards trends that have great disruptive potential but are only beginning to catch on to main-stream adapters. Trends that are likely to experience tipping points in the next 5 years. His work with Harry Dent – studying how people spend their money as they go through predictable stages of life and how that spending drives our economy – helps he and his subscribers to invest successfully in any market.