Image by cliff1066 via Flickr
If you know where to look, the American consumer is not buying into the U.S. Treasury and Federal Reserve great debt experiment. Port traffic is still declining and indicators show no sign of a major resurgence. If you look at the recent weak outbound pace of containers that are empty what we can expect is continued weak demand for imported consumer goods. Given that most of our goods are imported, this is a bad sign for our local economy but also global economies that produce those goods.
It is rather startling that so little focus has been given to job creation. 21 full months into the recession and there is still no concerted effort on stemming the massive unemployment problem. This issue is directly tied into the weak consumer demand. The American consumer is not in a spending mood. We can expand the access of credit available to banks but the access to credit is limited if they have no viable customers to lend to. Apparently banks now realize that giving money to those with no income history or capacity to pay debt back was a bad move. So why are they asking for so much liquidity even though they refuse to lend? The answer unfortunately is that they are borrowing liquidity to patch up their own problems. The American consumer is on their own.