Americans raid savings, putting recovery at risk
http://www.msnbc.msn.com/id/46025535/ns/business-stocks_and_economy/#.TxXc029STw0
http://www.msnbc.msn.com/id/46025535/ns/business-stocks_and_economy/#.TxXc029STw0
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The time-bomb is ticking
- Thread starter nitro
- Start date
Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.
American households "have been spending recently in a way that did not seem in line with income growth. So somehow they've been doing that through perhaps additional credit card usage," Chicago Federal Reserve President Charles Evans said on Friday.
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This is very interesting. People with the high fico scores, managing life with "credit" to "maintain" this situation coudl very well have dire consequences for the economy when they are tapped out.
The big payback might come when they can sell their house (hence no real future prospects of additional income) but.... if those houses don't sell, we might see the very "credit worthy" out of credit, lose their home and have zip for retirement.
This scenario may take a few years to play out, but boomers want out of the mc mansion lifestyle. The fun of mowing 2 acres with your John Deere ain't much fun with no money and no creditand no job prospects.
American households "have been spending recently in a way that did not seem in line with income growth. So somehow they've been doing that through perhaps additional credit card usage," Chicago Federal Reserve President Charles Evans said on Friday.
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This is very interesting. People with the high fico scores, managing life with "credit" to "maintain" this situation coudl very well have dire consequences for the economy when they are tapped out.
The big payback might come when they can sell their house (hence no real future prospects of additional income) but.... if those houses don't sell, we might see the very "credit worthy" out of credit, lose their home and have zip for retirement.
This scenario may take a few years to play out, but boomers want out of the mc mansion lifestyle. The fun of mowing 2 acres with your John Deere ain't much fun with no money and no creditand no job prospects.
Lessee: I have three nieces. One has been working for a few years, and is travelling the world and making nice bucks. The other, after a few years of aimless wandering, found a good job in NYC and is also making nice money, and living only a short distance away from her sister, which probably annoys the both of them.
The third is in college in Georgia.
I have one nephew: he fell into a job at a place that sells movie props & such to folks who go in for that kind of thing, and is doing very well. He'll soon be starting his first year at college.
My brother continues with his job, a high paying one with a very specialized skill.
My brother-in-law runs his own vet practice in Mexico, mostly catering to expatriate Americans.
My sister stays home, but her husband is a successful executive, so that kinda works out, eh? She got her master gardener degree, and is off and running doing that stuff, and annoying me whenever she comes up here and looks at our backyard.
In my neighborhood, the guy across the street who was struggling found a job a year ago in NYC doing stuff that's right up his alley. Everyone else is steady state.
In short, life goes on as normal in these United States. Don't believe everything you read.
The third is in college in Georgia.
I have one nephew: he fell into a job at a place that sells movie props & such to folks who go in for that kind of thing, and is doing very well. He'll soon be starting his first year at college.
My brother continues with his job, a high paying one with a very specialized skill.
My brother-in-law runs his own vet practice in Mexico, mostly catering to expatriate Americans.
My sister stays home, but her husband is a successful executive, so that kinda works out, eh? She got her master gardener degree, and is off and running doing that stuff, and annoying me whenever she comes up here and looks at our backyard.
In my neighborhood, the guy across the street who was struggling found a job a year ago in NYC doing stuff that's right up his alley. Everyone else is steady state.
In short, life goes on as normal in these United States. Don't believe everything you read.