What is interesting is that this is apparently being watched closely by Wall Street. I was talking to a money guy a few weeks ago and he said, "America's bankrupt. They're maxed out on credit cards, mortgages and home equity loans. The party's over."
He said this when the market was moving close to 11,000, which I pointed out. All he said was, "Watch what happens."
This is why I find it difficult to square what the guy said in the first article (bankruptcy based on credit card debt is a myth). Someone is wrong here!
There have always been "party's over" folks out there. Some day they will be right. But now? Don't know.
One thing I never hear economist types take into account is the large cash (investment) stashes many people have these days. For example, many people made loads of money on a property. They bought the next property and, on paper, maxed out on mortgages etc., but they know they have a load in the bank/market.
Also as boomers start inheriting the fruits of their parents' frugality, responsibility (insurance, etc.) and plain old appreciation (or property held for many years, etc.), assets that don't show up as family income will have more and more of an effect on family spending.
Interesting anecdote. I think there's a lot of truth to what that guy is saying, but let's be realistic here -- America has been "bankrupt" for decades now, and nothing has really changed in the last couple of years.
That may be why the Fed has been infusing new currency into the money supply of late and that in March they plan to "hide" IE. not announce publically the M3 statistics anymore...something nasty is coming down the pike!