bailouts, Business Practices, Capitalism, consumer based economy, consumerism, corporations, credit default swaps, Cricket Diane C Sparky Phillips, cricketdiane, currency values, financial derivatives, free market economy, global economic crisis, pricing, Principles of Economics, product pricing, supply and demand, US dollar, US economic crisis, US Economy, US government bailouts, US government policy
80% of the population may be doing just fine, however, they do not support 100% of our economic growth nor the entire US economy. If a view is taken around any corner in America, it will be evident that some goods are no longer being offered on store shelves, stores and restaurants are out of business and chain stores have closed.
That is because our economy does not rely on moderate sales from 70 – 80 percent of our population but rather on heavy sales distributed across nearly 100% of the US population. Without this, jobs are lost and further buying power is compromised until it erodes consumer purchases and opportunities of the 80% still doing well.
What does consumer confidence have to do with it? The reality is based on a simple fact that occurs when everyone is selling and no one is buying. The fact or event is called, “market glut” and it means there exists much more than can be supported by the purchasing power available.
In any study of economics, it is stressed that supply and demand drives prices. But, in fact what is currently happening is described by a holding tactic to keep prices the same or by raising prices to keep profits at the same percentage while sales are dropping like a rock.
This artificially appears to maintain asset values while market foundations can actually be eroding. Which, without change is the significant event happening now.
Written by Cricket Diane C Phillips, 08-19-08, 10-14-08, USA