One of the more interesting developments to see whether the economy has bottomed out will be the retail numbers after Christmas. Since the November and December months are the two most profitable months in retail, the performance by retailers will signal whether money is being hoarded or spent. According to the latest retail data, same store sales are falling throughout the industry. Only Wal Mart currently seems to be above the fray.
The question remains, will Americans go through credit cards and pay 30% interest on the newest toys and gimmicks? At some point the shopping spree has to end, as wages are not rising as fast as inflation yet Americans are trying to stay at the same level of consumption. These two things cannot be kept going in the long run, as the end result is greater and greater debt.
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