We were all drunk with spending. The housing asset bubble delayed the collapse in Aggregate Demand from the tech boom bubble.
Consumer Demand will never be as high as it was before with the world bankrolling American spending with financial derivatives and creating invisible money with credit default swaps.
Its time to tighten the belt and hold in for a bumpy ride.
“Consumer Demand will never be as high as it was before with the world bankrolling American spending with financial derivatives and creating invisible money with credit default swaps.”
It wasn’t just the world- credit cards and mortgage lenders would give money to anyone with a pulse. With Greenspan throwing gas on the fire all along with his cheap money. The recent US economic model of exporting debt while importing actual goods is unsustainable. At some point, even China is going to get tired of buying our Treasury bonds that they know are going to be paid back with cheap dollars.
Not all of us. But we sensible ones get to take the ride with the fools who created all this crap. And our tax dollars will go to bailing them all out. It's infuriating.
Yes, I agree. Not only do consumers need to curtail spending, but the government really needs to rein in spending. Unfortunately, I don’t see that happening.
As for housing prices coming down, a couple of years ago the whining and complaining was all about how fast prices were rising so that “nobdy” could afford to buy a house. Make up your mind, media people, because you can’t have it both ways. House prices cannot rise and fall at the same time. Sometimes it’s good for sellers and other times it’s good for buyers. I just wonder why I always seem to be on the wrong side of the deal. ;-)