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Americans Just Blew $850 Billion on Christmas But Here's Why That May Not Actually be a Good Sig

• https://www.theorganicprepper.com

(Dec. 26, 2018) The preliminary numbers are in and it appears that Americans exceeded last year's shopping frenzy with an even more extravagant one this year. Mastercard says that spending was up 5.1% over last Christmas, which brings us to an astronomical $850 billion spent between November 1st and Christmas Eve.

Of these shopping sprees, online sales increased by nearly 20%, which means that we could soon see another wave of brick and mortar closures, just like last year. Amazon pretty much owned Christmas, with a "record-breaking" holiday season, reporting one billion items delivered for free.

Three times as many purchases this year were handled by Alexa, too, which means buyers didn't even have to type in a credit card number.  "Alexa, find me a bankruptcy attorney."

So, even though Americans blew through $850 billion dollars at Christmas, this may not actually mean that the economy is on the upswing. All the problems there before the holiday didn't just go away.

All this spending is good news for the economy, right?

Wrong.

Before you get too excited thinking that all the negative predictions are just hogwash, Zero Hedge puts the spending binge into alarming but unsurprising perspective.

But though analysts might be tempted to cite holiday spending as an example that consumption is stronger than the hard and soft data would suggest, and that the mighty US consumer just might come through and save the US economy from a late-2019 or early-2020 recession, there is one thing to consider: As the latest raft of spending data revealed, spending outpaced incomes once again in November, sending the savings rate lower, suggesting that this latest consumption binge was largely fueled by debt.

In other words, analysts who interpreted these strong holiday sales as one last binge before the end of the business cycle might soon be vindicated. (source)

So, in reality, what seems like a bunch of prosperous people going out and treating their families to well-deserved gifts and holiday joy is just the opposite. This Christmas was most likely an example of people who couldn't afford to spend saying, "to heck with it" and maxing out credit cards that they may never be able to pay off.


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