"Sad Masks" by Lidia Simeonova
There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.
But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:
- An $8 trillion negative wealth effect from declining home values.
- A $10 trillion negative wealth effect from weakened capital markets.
- A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."
"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."
Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.
The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.
By Aaron Task
2 comments:
When you get rid of your industrial base, especially those things needed to produce a good war-fighting machine (steel, resources, etc.), then the economy will tank, it's just a question of when.
As for me, I'm switching to biodiesel and my tank will be easier to keep full. And I'll upgrade my weapons to take care of their Tank, too.
Many ppl are starting to say why they are unhappy with Obama's policies. An accurate analysis and realisation. What can you do next? Or what would you do?
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