A Christmas Bubble

With retail numbers so low, unemployment growing and recession well underway, even in the light of the holiday (see: shopping) season, where do we go from here? What happens once the craze of gift giving falls off and winter sets in?

Isn’t every holiday season an annual retail bubble? Any business that projected it’s sales figures based on research done between Thanksgiving and Christmas would find itself shit out of luck come march. We are currently in an elevated, artificial state of retail demand right now. Yet we are still in a recession.

What happens when people stop buying gifts and refocus their efforts on the day to day grind, i.e. survival? Retail figures will drop. Further insolvency will ensue, and the recession will deepen. For this reason, among others… this is far from over.

Despite my prediction that sales will drop further in the coming months, I do not advocate any measures taken to ’stimulate’ spending. If people don’t want to spend, that’s there prerogative. It’s up to businesses to figure out what people want and give it to them. It’s not up to the government to make people spend when they can’t or shouldn’t.

Remember we’re not in a financial crisis because theirs not enough to lend or because consumers aren’t buying enough. We’re in a crisis because of years of excess at the hands of our banking system and now they are clamouring because some got caught without a chair when the music stopped.