The 70% Consumer Economy is More Dependent on Credit Cards for Basic Goods
According to a recent report by First Data Corp, Americans are increasingly turning to credit cards to purchase food and fuel. The dollar volume of purchases charged increased by 10.7% in the last year. The number of transactions also increased by nearly 7% showing that Americans are using their credit cards more frequently to purchase everyday items. This is a trend that we see happening as joblessness rises and price inflation moves ahead of wages for those that do have jobs. FutureMoneyTreAnds.com has also discussed how the billions of dollars that are artificially coming into our economy from people not paying their mortgages, basically living rent free.
According to Wal-Mart and the Dollar Tree, the paycheck cycle for shoppers is severe. Stores are noticing that shoppers are dropping off towards the last 9 days of the month, basically showing that monthly paychecks are not making it as far as they used to. According to Silvio Tavares, senior vice president at First Data, the swings in purchases of fuel and food have been “dramatic.” The volume of credit card purchases for gasoline has jumped 39% from last year. Food credit card purchases have also increased 5% in the past year, we should note that currently over 44 million people are on food stamps in the U.S. with this number breaking records month after month for the past 2 years. The charges to credit cards also outpaced debit cards, something that FutureMoneyTrends.com sees as a real problem since eventually this temporary relief from Americans borrowing will be maxed out.
Unlike the government, taxpayers can’t simply vote to increase their own personal credit line, they will actually have to come to terms with their financial situation. Many economist who see an increase in credit card spending may actually look at this as a positive sign, that is why it is important forFutureMoneyTrends.com members to look at the bigger picture. Americans are spending and borrowing more, but the fact is, they are borrowing more just to survive.
Are we in a recovery?
FutureMoneyTrends.com believes that due to government and media propaganda, Americans are currently experiencing the illusion of a recovery. During the last deep recession in the U.S., the recovery saw GDP grow at 7.1%, however, the current fake recovery GDP growth printed at 1.5% in the second quarter. This of course includes government spending which is borrowing 40-50 cents for every dollar spent, rent free living for millions of Americans, 99 week unemployment compensation, record breaking entitlement spending, a contracting adult workforce, unprecedented bailouts, and who could forget the monetization of our debt by the FED. We bring the question of recovery up because it is important to base your financial and life decisions off of the truth. Nothing angers us more than seeing millions of people make decisions because they believe government propaganda touted by the media as fact.
Probably the only person in D.C. we truly trust is congressman Ron Paul from the state of Texas. He recently had a great interview on PBS news hour where he covered a range of issues including exactly where he would start cutting in order to balance the budget in his first year as President of the U.S. After reading government and media reports for most of the day everyday, we can’t tell you how extremely refreshing it is to listen to this man.
Gerald Celente Predictions Coming True
Gerald Celente of the Trends Research Institute is often quoted saying “when people lose everything, they lose it.” Last week police officers shot a man several times after setting his foreclosed house on fire. What surprised FutureMoneyTrends.com staff was after we heard about this story, we did a search for it on Google in order to get the details. We searched “man burns down foreclosure” expecting the story from last week to pop up, instead what popped up was dozens of other stories, from foreclosure suicides, murder, arson, swat team standoffs, and even people hiring others to burn down their foreclosed homes. In fact, to find the most recent story that happened last week, after viewing over 50 headlines, we finally had to target our Google search to just news in the past week. If you recall in an article posted after July 4th, many cities experienced crowds that became violent at beach parties, one incident even closed down a water theme park. Clearly, this is the exact type of reaction Mr. Celente was talking about, unfortunately this is probably just the beginning.