Wednesday, Feb 07, 2007
American middle-class drowning in debt
The Telegraph: Spending spree over as Americans walk without safety net
Americans are drawing down their personal savings at the fastest rate since the depths of the Great Depression, suggesting that US household finances may be more fragile than they look.
Posted by sold 2 rent 1 @ 12:53 AM (147 views) Add Comment
11 Comments
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1. bidin'matime said...
Bloody Hell! And it's coming our way!
2. tyrellcorporation said...
Sobering! Some big stats in this article. I read yesterday that the UK is in debt to the tune of 167% of GDP compared to the US which is at 111% and Poland at just 27%.
We really are in a mess...
3. denzil said...
Those who have cut their financial cloth accordingly will be just fine.
Anyway we live in a miracle economy so we have nothing to worry about at all.
4. Chilli said...
yeah. But when they came out with that figure, there were counting pensions. Which is a liability, but not as a result of careless spending.
At any rate, this situation has been heating up for a while.
5. dohousescrashinthewoods said...
The UK must be in recession. We must be in a shocking state. Can any of us "demesmerise" for long enough to smell the coffee?
6. Syd said...
So I don't understand? have we done away with the boom bust aspect to the property 'market'? Everybody seems to think that we have.
7. harold said...
All it will take is for stocks to go into reverse for the great illusion to be finally over and for the whole lot to come crashing down. Sooner or later...
8. sold 2 rent 1 said...
Syd,
Boom and bust is alive and well.
We are just in the final year of the boom (when everyone says "it's different this time")
Expect and prepare for the bust to start in late 2007 / early 2008 and last for 3 years
Also expect the next 15 years to be not as good as the last 15 years
There are both short and long term aspects of such asset bubbles and debt creation
short term - recession
long term - the households that don't get reposessed or go bankrupt will have much lower disposable income for a long time to come
9. Andy said...
The UK has pegged some of it's currency to Gold.
In the US after 1971 it was pegged to Bulls***.
Trouble is we are exposed to some of that.
10. harold said...
Sterling pegged to gold??!! Come again?
11. Wilee said...
"A random audit in Virginia found that 60pc of borrowers had exaggerated their actual income by more than half when applying for a mortgage..."
Always thought self-certification / lax lending checks were more of a British phenomenon. Guess not.