Debt Economy vs. Real Economy…no so different……

[jueco2005]

Quote from LeeD:

This effect is spread far outside America and has nothing to do with consumption being fueled by debt.

Modern industry is based on items that get replaced rapidly. Think of a modern shaving blade that serves for a week compared to the old time shaving blade that looked like a knife and served for generations.

I agree, but why (for example) cars use to last more than 3 decades just fine, and now their life expectancy has been reduced to just one.

I think debt economics has enable the real productive economy to design products with a shorter useful life. If I am not wrong, cars used to be able to handle hundreds of thousands of miles, today when a car makes it to 100k its pretty old, I know of no car that made it to 200k.

Think about it. Both banks and car makers (in this example) make a lot of money out of us by making cars that last just less than 10 yrs. It is no coincidence that by the time you finish paying off a 6 year car loan, the car starts having problems and almost 80% of the time you will buy another car.

 

[151]

Quote from jueco2005:

Debt Economy vs. Real Economy…no so different……


I. In my home country, Cuba, we still have American cars from 1957, 1954, 1945, running just fine. Today NO American car will make alive after 15 yrs. NOTHING IS BUILD TO LAST ANYMORE. What America produces no longer validates its level of consumption.



Thank you.

I am curous, thats all, how many miles per year would you say these vehicles are driven? And what is the average speed limit in Cuba?

Thanks

 

[jueco2005]

Quote from 151:

I am curous, thats all, how many miles per year would you say these vehicles are driven? And what is the average speed limit in Cuba?

Thanks

You are missing the point. This is not about the car industry, but I used as an example to demonstrate how this industry has change the quality of its product thanks to cheap credit.

 

[Scataphagos]

Quote from jueco2005:

You are missing the point. This is not about the car industry, but I used as an example to demonstrate how this industry has change the quality of its product thanks to cheap credit.

True. It now often costs so much to repair (vs. the cost of "new") that it's logical to throw away and replace... much of our economy is based upon this fact.

Years ago I didn't buy extended warranties. Now, however, I do. But if past the extended warranty period and something fails, I replace rather than repair.