Zeev's Turnips Patch-No Politics (ZEEV)

[jdaasoc]

that consumer debt is at a record level is really not that critical if consumer's disposable income is also at a record level

Agreed. The consumer is going back to the stores again with reckless abandon. Fueling their spending and cushioning the lenders from what could be any 1-2% higher default rates are low interest rates and deficit government spending.

The potential of falling GDP is more remote and growing more remote month by month since people are hard pressed to stop spending.

Bush seems to totally committed to reducing our oil import dependent deficit by pushing full speed ahead with war with Iraq.
It is the manufactured goods deficit I just can't see clearly how we fix it. A much cheaper dollar could in theory fix the shortfall in exports but I don't see how it comes without the pain of domestic inflation in the form of increased cost of imported goods since at some point the Asian countries would not mark their currencies to US dollar. This would be very bitter medicine to take IMO. I can see Americans complaining much more bitterly then what has visited South America.

You have been focusing on trade deficit to GDP ratio as short circuiting the stock market as it gets to 5%. Go over this one more time with as many of new facts as they now stand.