Economic Disruption

For all 2006, people spent more than they earned, making the savings rate the worst since the Great Depression. Commerce said Thursday that the savings rate for 2006 was a negative 1%, meaning that not only did people spend everything they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4% in 2005 and was the poorest showing since a negative 1.5% savings rate in 1933 during the Depression.

• JJ Commentary: With consumer borrowing continuing to rise, as well as government debt and trade deficits, and with the dollar falling precipitously against the Euro, the U.S. is in prime position for severe disruption, especially if China and Arab countries continue to sell of their large stockpile of dollars. Osama Bin Laden has stated that his goal is to bankrupt America – this could be the year