The weight of the global economy rests on the American consumer, says J. Christoph Amberger. That’s who all these government bailouts are trying to reach. And unless shoppers throw caution to the wind this Christmas, we could be in for a rough ride.

This from Today’s Financial News:

The U.S. dollar dropped against the euro as the Commerce Department reduced Q3 GDP growth to -0.5% and the Fed announced that it was getting ready to throw another $800 billion into the fiery furnace of this fine financial mess.

Why did the greenback drop? I think it is more of a reflexive move. Investors still think in bi-polar terms: If things look bad for the States, the grass must be greener in Europe.

Of course, it isn’t. It never was.

If anything, Europe is worse off than the United States. The EU economy has turned recessive a full quarter before the U.S. economy. While GM and Ford are still talking about idling facilities, German automotive workers are already scheduled for four-week Christmas vacations. Not because the European system of managed idleness wants to provide time for introspection… but because people aren’t ordering cars!

But production lines creaking to a festive halt means plummeting demand for resources. Oil, natural gas, steel, iron — all have erased years’ worth of price increases.

So have nickel, cobalt, copper… inventories are overflowing and not even China’s much-touted trillion-dollar “stimulus” will bring prices back up.

Only goldbugs are still bidding up bullion.

Now, 60% of actual gold demand comes from jewelry sales. Where exactly people will be splurging on bling this year and in 2009 is anyone’s guess: The Chinese and Indian middle class is seeing their export base eroding due to parsimonious Americans and cash-strapped Europeans. Rajiv, alias “Bob”, has stopped calling Joe Sixpack to save him money on his mortgage. And shiploads full of Chinese-made toys are stuck in Chinese ports because letters of credit aren’t clearing.

To make things worse, portfolio valuations in Beijing and Bombay are down by over 60% for the year… and the cure-all of “domestic demand” really leaves a lot to be desired when you figure that a middle class discretionary spending budget in China and India is less than $2000. In a good year.

That leaves the vital need of Dubai and Abu Dhabi to equip every one-bedroom efficiency with solid gold bidets. But even the golden pleasure domes decreed by sheiks and emirs need cash to operate… and at $50-and-below oil, the oil princes are already short twenty bucks a barrel on their “conservative” budgets for 2009.

They may have to switch to sterling silver sinks soon…

The crux of this crisis is that in the medium term, there is no ying to our yang.

And unless the American consumer throws caution to the wind and converts his saved energy expenses into consumer goods in the next four weeks and beyond, we may see a return to the economic world most financial newsletter writers seem stuck in for the past thirty years.

The world of 1979.

Only that there’s no Reagan in sight…

The world’s future prosperity now relies on you to buy pre-lit artificial Christmas trees, the latest iPod, a Honey Baked Ham, and a Mini Cooper for little Zachry or Brittny.

Just as it always has.

Source: The bi-polar dollar delusion… why the world depends on you