Monday, July 9, 2007

Buried in a Landfill Of Debt

What is a country whose GDP is built on a foundation of debt? DOOMED...

May Consumer Borrowing Jumps 6.4 Percent
Monday July 9, 7:09 pm ET
Consumer Borrowing Posts Hefty 6.4 Percent Increase in May, Propelled by Credit Card Debt

The Federal Reserve reported Monday that consumer credit rose at an annual rate of 6.4 percent in May, far above the small 1.1 percent gain of April.

The increase was propelled by a surge in the category that includes credit cards, which rose at a rate of 9.8 percent in May after having a tiny increase of 0.2 percent in April. The jump in credit card debt was the largest since a 14.5 percent rate of increase in November.

"April consumer credit surprised us by being weaker than expected, and the May performance was stronger than expected. Probably, the best thing to do is average the two months," Wyss said.

The overall economy, weighed down by a slump in housing, grew at a lackluster rate of 0.7 percent in the January-to-March quarter, the weakest showing in more than four years.

But economists believe strength in employment and consumer spending will help provide a stronger performance in the April-June quarter, with many looking for the gross domestic product to expand at a rate of 3.5 percent or even better.

The report on consumer borrowing will provide support for the view that consumer spending has held up, despite the weakness in home sales and soaring gasoline prices during the spring.
For May, consumers increased their borrowing by $12.9 billion to a record level of $2.44 trillion. Economists had been forecasting that consumer borrowing would rise by a much smaller $6.5 billion.

Strength in employment and consumer spending? LOOOOOOOOOOOOOL!!! The strength in employment is blatantly fictitious and the strength in consumer spending is obviously the result of a multiplying mountain of debt. IMO they should have a new GDP report that is "ex credit card debt". For without the plastic, this country's economy would certainly be going in reverse. These numbers are, and should be, alarming. They should not be trumpeted as "positive for the economy going forward". They certainly didn't lend any aid to the tumbling US Dollar. Rising consumer debt, government debt, corporate debt...never forget: Each and every Dollar is a promise to pay a debt. The world is awash in Dollars, and therefore an insurmountable pile of debt. A pile of debt that will one day bury our nation in despair. Rise above the pile of debt...BUY Gold and Silver.

I stop to much of May consumer credit card debt was to purchase food and gasoline. Oh, that's right, I forgot...nobody buys those items. That is why we don't include them in the national Consumer Price Index. What year is it anyway? 1984?

Gold made an impressive move today through 658. Gold tried to break away from da Rat Bastids on the Comex this morning, but was quickly capped at 663...within a whisper of the last straw at 664. Gold and Silver both fell quickly after the Comex open this morning, despite rising Oil prices and a relatively flat Dollar. The Comex Vermin are going to fight furiously and without honor to suppress both Gold and Silver as we move ahead.

Silver made a made dash thru 12.75 to post a high of 12.86 at precisely 8:45AM EST. And battled with the Vermin for the balance of the day to successfully close above it's 65 week moving average and key Fib resistance noted yesterday as well.

Silver was well into the 13s, Gold was trading in the 670s, and Oil was capped at $67 the last time the Dollar was this low in late April. Gold and Silver are wound very tight right now. It should be noted that the MACD on the daily chart of Silver only just crossed over bullish on Friday. Four days after Gold's daily MACD crossed over bullish on the 1st of July. We've only just begun. And what have we begun? The beginning of the end for dem Rat Bastids.

Gold support should begin to firm now at 653, with silver support now at 12.46. Gold may well bang around between 656 and 663 for the balance of the week prior to Friday's Retail Sales Report. Silver may do much the same between 12.62 and 12.80. A consolidation in Oil prices here is/was to be expected with hidden resistance at 73.75. Prices hit 73 on Friday. Oil prices should remain above 70, with solid support at 67-68. Consolidation in Oil prices may not be enough to hold back a rise in the Precious Metals as the metals have some catching up to do. Copper closed above 360 today. Silver and Gold both are lagging Copper. Gold needs to reach 675 just to catchup to Copper now. Could Copper breaching 375 signal a Gold move to 700 is imminent? The Dollar remains at a crossroads here with few friends and little in "economic data" between now and Friday to try and hang it's hat on. Friday's Retail Sales data could be the straw that breaks the Dollars back...but I won't hold my breath. It's 1984...

No comments:

Post a Comment