My latest rant from BlownMortgage
How deaf is Ben Bernanke? With the US savings rate hitting a 14-year-high, the Fed unveils a $200B plan to “aimed at boosting the availability of credit to consumers and small businesses.” While I hope this will be of use to businesses in need of it, consumers have already made it clear they’re not interested.
As Morgan explains:
I guess the theory is consumers will ignore EVERY SINGLE PIECE OF ECONOMIC INFORMATION AVAILABLE and decide to buy stuff because the credit is now available. At a moment when we are losing (conservatively) 600K jobs A MONTH, who in his or her right mind is going to buy a new car, house, or hot tub? ESPECIALLY when prices are being pulled toward terminal velocity. If consumers did this it would be so far past irrational as to call it “insane exuberance.”
Dear Ben, a lesson from Marketing 101: In order to be successful a product has to fill a need in the marketplace. Consumers don’t want debt! Not only do they not want debt, they’re not going to spend the money they already have. So there’s no way you’re going to get them to purchase stuff right now. Consumer behavior is now a lagging, not leading economic indicator. Consumers will start spending after — NOT BEFORE — the economy gets back on track.