Originally posted by aleon1018
So, is this when people start using their credit cards just for fuel without the intention of ever paying it back? Because more than likely these same
SOBs (banks) are the same ones who are profiting from these oil price hikes. Perhaps it is oil that is the beast that was and is not and yet is?
Actually that happened approx 3 years ago believe it or not. In the past decade Americans have racked up significant debts compared to other time
periods, mostly because of easier credit.
When gas stations started demanding pre-paid only via cash at the counter or credit card slots at the pumps, because people couldn't afford the gas
and just drove off with out pay, more and more and more people use credit cards.
I personally use a check card for everything, that way it is taken out of my account without interest.
But I remember watching CNN last year (tried to find the article) and they said credit card usage at gas station pumps went up over 40% in that year
alone.
Perhaps this is why America has not been effected by the rising oil prices. Oil rose 60% in 2007 and we didn't feel any negative effects in the
market until really just this summer when things officially turned for the worst. Because people put the gas on plastic, they don't directly feel
the effect of it. And no doubt, they don't pay off the card either. Add that to the mess.
If everyone stopped using those damn plastic cards, prices would drop dramatically, there would be less demand for material so far above our means
because no one could buy with imaginary "IOU's" ..
Anyways,
I expected the DOW to drop below 13,000 today, with the manufacturing news.
I remember as the currency began its ever steeper decline, the optimist here at ATS where declaring this a godsend to America.. that our manufacturing
is cheaper worldwide with a weaker currency thus it would pick up! ...
Well guess what.
Currency dropped even more since then, and manufacturing took an unexpected drop.. and then the currency fell some more because of it.
I personally cannot wait for the big retailers to disclose their earnings for the holiday spending.. I don't think people spent as much as usual, and
I think it may be evident in that stores demanded less manufactured goods. IMO, a weak holiday season will determine whether we continue straddling a
recession or officially take the slide into one.