Written By: Security Trade Ideas in Sep.  of 2019

Security Trade Ideas (STI) September 2019

“Robust economic growth only comes from one place: savings. Not consumption.”

As you know, the usual format for our post consists of five sections: Opinions, Financial Events, Economical Events, Security/Stock Trade Ideas and Education.  However, for this post I have decided to replace the Financial Events and the Security/Stock Trade Ideas section with an Analysis of Consumer Spending, because it’s reported to be a major component of our economy.  In our prior posts, going back to 2018, we have emphasized staying defensive in the market by investing in companies that have plenty of cash on hand (cash flow), good earnings, low or zero debt. Here are few defensive Exchange Trade Funds (ETF):   XLU (Utilities), IYR ( iShares US Real Estate ETF),  XLV (Health Care SPDR), GLD (The SPDR Gold Trust) and SLV (The iShares Silver Trust).

I am not an economist but I have been a business, technical and procedural analyst for more than forty years.  I asked myself “How can consumer spending, which accounts for more than two-thirds of U.S economic activity be a pillar of our domestic growth, supported by low unemployment and rising income? Therefore, I decided to research and learn more about this topic and share it with you.

Can we continue to rely on the Consumer to save us in the U.S. economy? All I hear is that “The U.S Consumer is Strong”! I asked myself:   Can we depend on the U.S consumer to run our economy?  Extensive borrowing leads to economic disaster.   When was the last time we were fooled by this information?  You will be surprised after reading my analysis and conclusion under the the section called  “Does the Consumer boost the Economy?” 

“To claim that consumption is the engine of economic growth is to put the cart before the horse.” Steve Patterson