Jason Rines (iThinkBig)

U.S. Credit Card Industry Moving into Uncharted Territory

It has become very simple for me since I looked at multiple variables of the health of the U.S. economy in June of 2007. The easy credit led economy which fueled our GDP in 2003-2007 created massive unsustainable public and private debts. The public debt serviced by foreigners is shrinking meaning investor confidence in the U.S. financial system has been temporarily destroyed. Between inflation caused by currency devaluation, wealth destruction in real-estate, energy consumption costing consumer 25% of monthly disposable income (I didn't include food), offshoring and lack of job creation (rather permanent skilled job destruction) the total net loss calculation was 8 Trillion dollars of wealth destroyed in a four year cumulative period. Or GDP showed -20 percent cumulative over the same period. Umm, isn't that a depression?

The entire U.S. financial system may just collapse, I hate to even think that is possible, but IT IS. If it does not, I speculate it will be four years out before we see the start of another true bull market.

Socialism in many forms may stave off outright depression, but the recovery is going to take a long, long time. Let me add this, the U.S. had better get it's head out of it's ass on monetary policy (cut spending vs. indirect inflation tax on citizens) and an energy independence policy where we allow a new investment opportunity back into America that creates millions of jobs. This increases our odds of avoiding depression rather then 1970's style economy.