Yesterday brought news that Toyota sells more automobiles in America than Ford does. But nothing to worry about, say economists, soothingly.

Of course, we agree; it is nothing to worry about. Like approaching death. You are far better off maintaining a serene outlook. Besides, it is summertime. We do not worry about things in the summer. There is plenty of time to fret in the autumn, winter and spring. Summer is a time for insouciance.

Still, we find that Ford has lost even more than expected in the last quarter - $254 million. And no chance of making it up on volume; those SUVs aren't selling, despite all the discounts and incentives.

We don't know how Toyota does it, but it looks to us as though U.S. consumers are slowly running out of money - just as we guessed they would.

"Mortgage default notices soar 67%," says the LA Times.

Starbucks stock has fallen 23% in the last 30 days. "Service sector activity cools in July," adds CBS Marketwatch. "Gas costs eat into restaurant sales," runs another headline.

A new friend, Dennis Gartman, tells us that the economy is definitely headed into a recession that will take stocks down 15% to 20%. He sees a kind of "stagflation light" infecting U.S. markets.

We also see stagflation, but light or heavy...we refuse to worry about it until September.

Meanwhile, the central banks are playing a dangerous game. They're trying to exterminate the "flation" part without letting the stag part get out of hand. The Bank of England made another move to the upside this week - raising rates to 4.75%. England, like America, has an economy that depends on a lot on marginal consumers, who depend on a marginal property market that depends on low borrowing rates...that are set by the banks. At some point, adding straws to our groaning camel's back, 25 basis points at a time, they are going to find the one that brings the critter to the ground. But only after they've laid it on. Then, they'll have the stag to worry about; the "flation" will have disappeared.

"But how is it possible," a man asked us in Vancouver, "to have deflation, when the Feds are all pushing money into the system as if they were shoving commuters onto the Tokyo subway."

We offer him our standard explanation: "What happens is that the means of pushing money and credit into the financial system break down," we say. "This is what happened in Japan in the 1990s. The Japanese cut rates to zero. The government borrowed money. The government spent money (it undertook so many public works projects that at one point, the small island nation poured more concrete than all of the United States). But the magic had vanished. As consumers saw the economy collapsing, they became very frugal. They wouldn't spend and they wouldn't borrow. Eventually, the authorities couldn't get any money into the system and prices went down. And then, as prices went down, consumers held back even more, because they knew that if they waited, they could get an even better deal."

Not that we're worried about any of this. We're as tranquil and content as a frog by a mill pond. But we still have our eyes open. And what we see is an economy stalling like a jet out of fuel. Will it be a light landing? Or a hard one? We don't know, but the risk is that it will come down with a smack. 

Next week, the Fed meets again to fix the price of short-term credit. After a long series of "baby step" increases, the Fed has walked into the specter of stagflation. It can raise rates again to fight inflation. But it risks breaking the economy's feeble credit-stiffened backbone.

Ben Bernanke reads the headlines, too. He's made a career of watching the Japanese struggle to get out of deflation. He knows how hard it is to resurrect the camel of a consumer economy after it has buckled at the knees. When the time comes to speak up at the next rate-fixing meeting - next week - our guess is that Mr. Bernanke will have lost his voice...and maybe his nerve.

*** OK, the United States may no longer be able to make it in the car business, but we're still number one at finance, right? When it comes to shuffling money, nobody does it better. 

But what's this? 

"Wall Street and Washington are fretting that many of the world's biggest initial public offerings are taking place on exchanges in London, Hong Kong, and Shanghai - and not in New York," says a Slate news item. 

"There is no single reason why IPOs are heading overseas...But as Alan Murray suggests in the Wall Street Journal...Americans are also losing our IPO advantage because we're not as good at them anymore. A report by Oxera Consulting, which the London Stock Exchange and the City of London commissioned, found that the United States - for reasons that have little to do with Sarbanes-Oxley - is more expensive and not particularly efficient at IPOs."

U.S. investment banks are too expensive; there's too much red tape and too many lawyers. Companies no longer need to list their shares in the United States in order to get U.S. investors. 

Yes, now even the money shufflers are being outsourced. 

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.