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For years, rising home prices and home equity loans helped people with stagnant incomes to keep up with record food and energy prices. With the collapse of the real estate market, it was beginning to look like there was nothing to take up the slack. But this morning, CNNMoney reports, Wal-Mart Stores Inc. (NYSE: WMT) customers who received gift cards over the holidays are using them for "food and consumables rather than discretionary purchases."
If that's really true, rather than a convenient excuse for a less-than-perfectly managed retail store experience, then it tells us that the U.S. economy is in a heap of trouble. That's because a consumer who uses gift cards to buy food instead of gifts is one that is running low on options. Compared to getting money from a pawn shop, a gift card is a compelling way to pay. But once that gift card runs out -- and it probably can't buy more than a month or two of groceries, then what?
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