I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
Tuesday, October 7, 2014
Consumer Credit: To Infinity and Beyond! (Musical Tribute)
The following chart shows consumer credit divided by annual wage and salary disbursements.
Ah yes, the famous early-1990s debt decline. And it came without crisis, and it came without depression. And it gave us the "goldilocks" economy of the latter 1990s, years that Robert Gordon referred to as a "macroeconomic miracle".
“The proceeds of increasing senior borrowings may be used for their own spending as well as to assist family members in supplementing their incomes and making purchases,” Wise said. “At the same time, rising debt levels by older consumers could lead to increased default rates if they are unable to meet higher loan payments with their often fixed incomes. This development certainly bears watching over the next several years."
Behold the new and improved macroeconomic miracle!
Well at least we're not at the top of the trend channel. Plenty of time for a credit disaster, like a whole year. This must be positive!
ReplyDeleteInteresting find.
ReplyDeleteI think a low channel failure is inevitable.
Cheers!
JzB
Ah yes, the famous early-1990s debt decline. And it came without crisis, and it came without depression. And it gave us the "goldilocks" economy of the latter 1990s, years that Robert Gordon referred to as a "macroeconomic miracle".
ReplyDeletedd & Jazzbumpa
ReplyDeleteWell at least we're not at the top of the trend channel.
I think a low channel failure is inevitable.
We can get back to the top of the channel again if we turn abysmal wage growth into something worse.
In fact, we can get to infinity if wages equal zero, lol. Sigh.
Gallows humor.
The Arthurian,
ReplyDeleteStudy: Borrowing Among Youngest and Oldest Consumers Shifts in Last Decade
“The proceeds of increasing senior borrowings may be used for their own spending as well as to assist family members in supplementing their incomes and making purchases,” Wise said. “At the same time, rising debt levels by older consumers could lead to increased default rates if they are unable to meet higher loan payments with their often fixed incomes. This development certainly bears watching over the next several years."
Behold the new and improved macroeconomic miracle!