Why aren’t they talking more about the U.S. consumer.

Oct.09, 2008 in Market Outlook

We have article after article coming out about consumers pulling in their spending ways and going to saving. Saving is absolutely vital if we are to get this nation back to a sound economy but, that also means very deep recession or depression that lasts for years.

This is not a recession like we have seen in decades. This is not a recession where the consumer wants to get back to spending like the others have been. This is a shift in economic power to Asia and a shift in consumer attitude from spending to saving.

Major shifts like that mark turning points that take years to play out.

For investors who get in at the bottom, when it comes and are in stocks that rapidly rise due to that global shift of power, probably emerging market stocks in nations with positive account balances, they will spend more. They will spend a lot more but, still have plenty of savings.

It will be the 75% of the population that aren’t in that position that will determine a lot of things here in the U.S. It will be the under employed or unemployed. It will be the people saving to buy a home or a car or to get out of debt that will determine a lot of what we will be facing.

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