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Most consumers are tapped out, bad news for a consumer driven economy. There can only be so much more debt accrued.
by notadoc 10y ago
Most consumers are tapped out, bad news for a consumer driven economy. There can only be so much more debt accrued.
- CodeCube 10y agoThis feels correct, anecdotally ... but is there data to support this claim? For example, savings rates going down, credit/debt going up, and consumer spending going down?
- tcoppi 10y agoHere's savings rate data: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT Note that this is savings rate net of taxes. It has been on a mostly steady decline since it has been calculated, with some spikes and a leveling out slightly higher than the rate before the last recession.
- warkdarrior 10y agoWhat happened from December 2012 to January 2013 for the personal savings rate to drop from 11% to 5%?
- falcolas 10y agoYou also have to watch for savings going up and credit going down, to reflect people who are sick of being in debt and shying away from it wherever possible.
- CodeCube 10y agoTrue that. I was like this for a good number of years, and it's only been recently that I've started using credit for a few things.
- notadoc 10y agoSure, take a look at student loan debt for one glaring example. Or the debt-to-income ratios required to get a home today versus 30-40 years ago. Credit card debt growth, medical debt growth, saving rates declines, etc.
- neonhomer 10y agoDon't you mean "bad news for a debt driven economy"?
- tonyedgecombe 10y agoYou can always inflate debt away (if you control your currency).