Global Economic Imbalance

From The West Wire

STA Wealth Management summarizes trends in consumer spending as plateauing. That means that American citizens, in a largely consumption-based economy, have began slowing down their pace of consumption. If we take into account the spending guideline, which reminds us that if someone’s spending habits change their spending means have changed, it would seem that people have less money to spend right now. In what would seem to be an agreement to our conclusion, ZeroHedge came out with a report analyzing people’s disposable incomes. Disposable income is the amount of money people have to spend after paying their taxes which is, basically, the money people have available to spend.  As it turns out, people have less money to spend now than they did right after financial chaos stuck the housing markets in 2008. In fact, disposable income is as low as it’s been in the last 40 years.  When people have less money, they tend to buy less things.

JP Morgan, over a four day period, saw 44% of their gold bullion holdings go out the door. It wasn’t stolen, it was merely claimed by it’s rightful owners who had been using the JP Morgan vault for safe keeping. If you are worried about the safety of your gold, you will keep it closer. Apparently there were a lot of people who felt their gold was safer in their personal safes than within the vaults of JP Morgan. Perhaps the sentiment Dr. Paul Craig Roberts shared, that the Federal Reserve doesn’t have any gold left, brought about this worry. When people feel banks are not properly protecting their gold, they ask for it back.

Recently Poland made the decision to take control of half of the entire country’s private pension funds. That means that people whose retirement funds were managed by private companies, now had their futures managed by their government. While the Polish government is still operating under the guise of maintaining the solvency of these pension funds, the only reason a government takes money in an unusual manner is because it needs money more than usual. When someone has less money than they’re used to, then they try to find new ways of getting money.

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