Yesterday's strong numbers on retails sales and today's weak data on industrial production, which reveals a third consecutive month of falling output from our nation's factories, mines, and utilities, show that Americans continue living well beyond their collective means. In addition, today's increase in consumer sentiment reflects the continued willingness of Americans to go deeper into debt to purchase imported products. Increasing consumption and decreasing production will result in further increases in American's enormous current account and merchandise trade deficits. How long will America's foreign creditors continue the greatest "vender financing" scheme the world has ever seen? How long will America's thrifty and productive trading partners continue to extend credit to profligate, non-productive Americans? How long before the world realizes that the de-industrialized American economy is no longer capable of producing enough exportable consumer goods to pay off its enormous external liabilities? I believe the answer to these questions is "not much longer." The American consumer, like the proverbial Emperor, truly has no clothes (unless, of course he imports them). It will not be long before the non-American producer finally acknowledges his nudity, and the dollar bubble will finally burst. When that happens U.S. consumer prices and interest rates will spiral upward, stock and real estate prices will collapse, unemployment will soar, and the U.S. economy will enter a prolonged recession as it enters a new era of savings, self-sacrifice and under-consumptions, and begins a long and painful process of re-industrialization.