The plunging line shows how much money we're saving right now.
The soaring line shows how much more we're paying just toward the interest on our rapidly mounting debts. Make note, that's just the charges on the borrowed money. Not the payment on the borrowed money itself.
It's like the claws of a gaping trap, getting ready to snap down on the average overexposed American. And when it does, expect financial disaster.
Here's the big problem...
The powers that be say that this trend of overspending and under-saving is all part of the recovery ahead. Washington's new favorite economist, Ben Bernanke, even talks about the dangers of a "savings glut" in other countries.
All while old Fed favorite Alan Greenspan has just kept on urging us to spend, spend, spend. Even if we have to borrow to do it. He's like a heroin dealer, pushing loose money and feeding the American addiction to credit until many of us have no choice but to keep on borrowing more, just to survive.
Thanks to years of imprudent interest rate manipulations by the Federal Reserve, the entire house of cards underpinning the U.S. economy cannot but HELP to fall apart. And it's almost guaranteed to happen, now, very soon.
It's that simple.
See, loads of easy money and open credit are terrific when an economy is soaring. Credit can help a business expand. It lets you invest in the future. It even lets you enjoy life a little better on the way up, making it possible to bank on riches yet to come. And our fellow Americans have been lapping up the opportunity, loading up on new cars, newer and bigger houses and lifestyles they couldn't normally afford.
The trouble is, the moment all that excess credit is withdrawn, everything falls apart!
House prices fall, stocks fall, U.S. bonds fall, the dollar falls, everything falls. Because liquidity is sucked out of the system. Nobody has money to spend. So there's no demand for the assets that only those with lots of credit and easy money can typically afford.
At this very moment, this is the gravest danger facing the American economy. Worse than terrorism. Worse than waning energy supplies or energy war. Worse than petty Washington infighting or scandals.
With our credit-driven economy so out of control, this could spell the end to the American economic experiment itself. Very quickly and with disastrous results, for all but the investors who were smart enough to protect themselves as early as possible.
Take a gander at this...
The Canadian numbers are better, but not by much. Canadian Savings are at 1.6% of income. What to do, what to do.
Good thing I know!!!
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