Savings in the the tank.... ....and no one has failed to notice that spending in August was a disaster. And August is 'back to school' month and EVERY analyst was expecting a bump up. Did not happen. Looking more and more like a 4th quarter recession. Then the fiscal cliff and that should put us nicely into a mega-recession. All good for gold. Paper people, gulp! It is all over Rover unless you live in Port Dover.
There were no surprises in the August Personal Income and Spending numbers, which came at 0.1% and 0.5%, respectively, on expectations of a 0.2% and 0.5% rise. Summarized: less income, more spending. This however, did not make the consumer income statement data any better: the bottom line is that adjusted for inflation, Real Disposable Income slid 0.3% in August, after a tiny 0.1% increase in July, the first such decline since November 2011, and as Bloomberg's Joseph Brusuelas says this is "another rough report for the consumer which doesn’t bode well for household spending going forward." Which means Bernanke knew precisely what he was doing when he launched QE3, which all advocated of QE3 will now say was fully justified. There is one problem with that logic however: for QE3 to be justified, it would mean QE1 and 2 were. Well, last we checked the US is still in a major recession, and neither QE1, 2, nor Twist 1 or 2 have done anything to prevent today's ugly data. Surely, this time it will be different. Finally, and as a result of the ongoing contraction in income, as expected the savings rate dropped from 4.1% to 3.7%: the lowest since May.
Run for your wife! GRR. 200,000 ounces or bust!