April 7, 2010

Today was the first beach day for us. The weather is fantastic for the entire day. The temperature went up to 90°F and at the beach it was easily above 80°F.

We couldn't go into the water because it was so cold that our feet went numb when we stuck them in. But it was very refreshing.

It was surprising how many people were out there on a weekday. And not all senior citizens but many able bodied men and women.

Either they just didn't go to work or they have no jobs and that's why they chose to sit out in the sun.

Anyway, it was a very good day!

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Last year they were advising people to cut spending and reduce credit card usage because that is the root of the troubles we are in.

People were spending and spending, putting their charges on their credit cards and then getting stuck with huge interest rates. The end result was that they could not afford the large payments and default followed.

This was what prompted the advise that to cut spending is the wise thing to do.

Then come the retailers who are at the receiving end of this curtailed spending advice. At first they cut their prices to attract the buying public (and they sell crap for the lowered prices) then they slowly attempt to return to their original pricing hoping the public would not notice it.

It seems people heeded the advice and slowed down their credit card usages. But now there are complaints about this. Today the market fell and one of the reasons is a report by the Federal Reserve issued today.

According to this report consumer borrowing fell again in February, reflecting weakness in credit cards and auto loans. Analysts said the sharp reduction showed that the weak economy is still making consumers hesitant to take on more debt.

The February decline was the 12th decrease in the past 13 months as consumers slash borrowing in the face of a deep economic recession and high unemployment.

Analysts said consumer borrowing is being held back by fears about job security with unemployment still near 10 percent and a move by banks to tighten credit standards following the severe financial crisis of the past two years.

Now what is it they want?

Do they want us to slow down spending and have a healthy financial situation at every home with no indebtedness to any credit card company and bank and consequently hurt the retail industry?

Or do they want us to go back and start or rather continue borrowing and eventually owe to every Tom, Dick and Harry but make the retailers and banks happy?

You damned if you do and damned if you don't!