Reply #35: Not quite. [View All]

[Frodo]

Consumption is close to record highs (if not AT record highs). The companies aren't (largely) closing their doors, they're replacing production with foreign production. That's not at all the same thing - though there's no question that for the individuals involved it FEELS like the same thing.

In the case described, inventories skyrocket precisely because people stoped buying things because they didn't have jobs, and more people lost jobs because there was no point in producing something you had tons of inventory of and nobody buying. You can look at the numbers from any angle you want, but there is nothing indicating that people have stopped buying things ... there's also no indication that lost production from job cuts has ot been MORE than offset (production wise) in other areas since GDP has continued to climb well above inflation rates. Sales of items produced solely in the US are rising, not falling. Unemployment is the economy's achilles heel, but it isn't anything like the depression, it strikingly similar to 1995/1996. The fact that we went way up from there and have come way back down means we've gone far off course, but it doesn't mean we're six inches from financial ruin.

There's jsut no way to look at a "better than expected" inventory report and say "gee that looks like 1929". It doesn't.