Consumer rebound gives economy solid boost in Q1

MOPE always has an interesting choice of words - heals. When the cause, excessive consumption, is positioned as the solution, it illustrates that very little has changed.

The Commerce Department's initial estimate of the economy's performance in the January-to-March quarter, released Friday, provided more evidence that the economy is strengthening. It marked the third straight quarterly gain as the United States heals from the longest and deepest recession since the 1930s. Still, growth was weaker than in the fourth quarter of last year, when the economy grew at 5.6 percent.

The Era of consumption that has depleted American savings and fueled the culture of excessive debt remains in tact. Personal consumption expenditures as a % GDP is 71%. This is only a tick below the all-time high of 71.1% in 2009.

Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947:


Savings (SAV) As A %GDP and Savings (SAV) As A %GDP Average from 1947:


Gross Domestic Private Investment, or money used to increase tomorrow's standard of livings, continues to drop. This is the American conundrum - Is the illusion more important the tomorrow's standard of living? These trends suggest that it is.

Gross Domestic Private Investment (GDPI) As A %GDP and Gross Domestic Private Investment (GDPI) As A %GDP Average from 1947:


The up trend in big government remains in tact.

Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP and Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947:


When causes of the problem as spun as solutions, it suggests that nothing has changed. Once the current liquidity phase ends, another painful hemorrhage phase will emerge. Let's not hide behind the illusion. It is the hemorrhage phases that are polarizing this nation.

Source: yahoo.com