This week's letter comes to us from Dr. A. Gary Shilling, president of A. Gary Shilling & Co., Inc. Gary is a long time friend and one of my favorite economic analysts.
Gary takes a look at what he has termed the consumer-dependent economy. The consumer has increasingly become a larger factor in driving our economy with the help of debt and loose monetary policy. Savings, GDP, housing, debt, and bankruptcy trends are pieced together to create a bleak picture of the baby boom retirement years. You will find this very interesting food for thought in this week's Outside the Box.
John Mauldin, Editor
Outside the Box
The Consumer-Dependent Economy
The dependence of the U.S. economy on consumer spending is nothing new. At nearly 71% of GDP, consumer outlays are not only up significantly from earlier years, but also much higher than in most other major countries (Charts 1 and 2).
Very Important Now