US economy is in a submission hold (thanks to Goverment/Federal Reserve recklessness) and the consumer can't tap out.

Near death looming. Not good. Listen to these jokers:

"The survey of 44 professional forecasters released by the National Association for Business Economics, also known as the NABE, found that 80 percent of the respondents believed the economy was growing again after four straight quarters of declines.

"The great recession is over," NABE President-Elect Lynn Reaser said."

To top it off,

"With improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," Reaser said." from: Reuters

Sad disposition for the US economy is the widening trade deficit (over capacity + increase debits) plus sinking dollar, huge fiscal budget deficits with all markets flat except for the stock market that is rallying on one thing; liquidity via the Federal Reserve. At some point there has too be some credit write-downs on the commercial credit market, so far the CMBS market has fallen out of the press. Some clever bank accounting with possible US Goverment/Fed support have extended a day of reckoning, but this should go so far.

In the meantime the underwriting of the whole US ecomomy by the US goverment should be straining quite rapidly, as US dollar concerns come into play by overseas investors and Asian/ Middle Eastern export markets. A crisis could occur only if the USD collapses through supports on the USD index, namely 0.71; at this point I wouldn't essentially say the USD is at breaking point per se, but before it reaches a critical point (namely the 0.71 support) I suspect the Fed will ask other Central banks to intervene. Which might cause a reprieve for a declining USD. Although all and all inflationary pressures now should be effecting the US consumer, again it is the two important inflationary indicators that being oil and food that are upward price pressures - which in turn are connected to everything else in consumption. So prices will be edging upward (across the board), against rising unemployment and a crowded out private sector. It is the beginning of a prolonged and broad based decline of wealth for Americans.

But a fiscal breaking point could occur very soon. If we get fear selling on the USD and global central banks cannot stop a declining US dollar. The Federal Reserve may have no choice but to increase interest rates from it's low 0%; if this is the case the Fed that is holding 300 billion plus Treasury Debt and 10 year bonds (which are more sensitive to interest rate changes). Simple bond equation: Yield up, price of bond declines (refer to The Keynesian zero bound rate and deficit effect - inflation overdrive.) so a 'sell' by the Fed prior to maturity, even if they need to reign in liquidity (by selling to investors it's bond holdings), is going to cause them to take a hit and a big one.

With investors dumping the bond market, the US deficits could structurally decay - without funding; so the tax equation must be factored in as the US goverment will have no other choice but to increase taxes. A total implosion scenario.