With an additional $2 billion in funding, the “Cash for Clunkers” program has a new lease on life until Labor Day. These are some of my reactions about the program.
My sense is that this program is designed to make consumers feel good again and give them a reason to buy and shop.
The program aims directly to put some life back into the auto industry and those who work in that industry. Hopefully it will help the businesses associated with this sector.
It is a transfer of wealth from us (who do not need a new car) to "them". The power groups called "auto industry" and "unions" are clearly the winners of the game.
The money spent to buy a new car could have been spent to buy other things, so net net, it is not much of an economic stimulus.
It is another example of industrial/social engineering. Now we are targeting cars. Years ago we targeted housing.
We are stealing auto sales from the future. When the program, ends, auto sales will drop again because consumers are losing jobs and have little money to spend.
It seems to me we are living in a world of smoke and mirrors. I hope to be wrong.
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
George Dagnino, PhD
Editor, since 1977
1 comment:
You are right. I should agree with you. In the past people try to buy houses. They wanted to be independent from their parents. Today we see they want to buy cars. That’s why very often why people don’t have enough money to do this. So they take mortgage or loans to have them. You may check Installment Credits for more information. This is a tendency which is very popular between people. They want to be richer that their neighbors. It was always and will be always. The site offers professional consultations on this financial issue.
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