EconomicCrisis.US

In U.S. history, there may have been no better time to own a junk car, a rattling old fridge and a leaking dishwasher.

On the heels of its ballyhooed “Cash for Clunkers” program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as “Cash for Appliances.”

Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.

And like the $3 billion cars program that gave consumers money for swapping their clunkers for more fuel-efficient rides, the appliance initiative seems destined to inspire shoppers, drive up sales for a while and profoundly divide economists over how much lasting good this chunk of government spending will do for the economy.
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Nouriel Roubini, the economist who predicted the global economic crisis, said a forecast by investor Jim Rogers that gold will double to at least $2,000 an ounce is “utter nonsense.”

There is no inflation or “near-depression” to drive gold prices that high, Roubini said today at the Inside Commodities Conference in New York. If a severe depression came to pass, with investors buying canned goods and hiding out in log cabins, “maybe you want some gold in that scenario,” Roubini said.

“Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense,” Roubini said. Gold rose to a record $1,096.20 today on the New York Mercantile Exchange’s Comex division on speculation that central banks and investors will purchase the metal to hedge against a declining dollar.
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Everything we know about classic economic theory suggests the U.S. economy should be experiencing Zimbabwe-like hyperinflation right now, thanks to the nearly $2.2 trillion the U.S. Federal Reserve has pumped into the system.

But we’re not…yet.

Classic economic theory says that money supply can be used to stimulate the economy and our central bankers seem to agree. That’s why they’ve pumped more than $1 trillion dollars into the economy, engineered countless bailout bonanzas for zombie institutions, put Detroit on life support, and delivered a bunch of financial Band-Aids to the trauma ward – all in a desperate bid to make Americans feel better about the global financial crisis.
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US consumer spending fell for the first time in five months in September after a government program boosting auto sales ran out, official data showed Friday.

Personal consumption expenditures decreased 47.2 billion dollars or 0.5 percent last month, as expected by most economists, following a revised 1.4 jump in August, the Commerce Department said.

The fall in spending came as Americans’ income turned flat in September following a 0.1 percent increase the previous month, the department said.

The highly popular “cash-for-clunkers” program, which gave consumers a credit of up to 4,500 dollars toward the price of a new car or truck if they turn in an older vehicle with lower gas mileage, ended in August.
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