We have to remember that prior to the recession, our whole life revolved behind the charge it system. You wanted a computer, charge it. Charging it kept the manufacturers, the transporters, the bankers, and retailers busy.
Now people are trying to collect the money to buy a new computer. Depending on the person and their income, this could take several months.
So, I guess the question to ask is what kind of economic growth are we expecting? Are we expecting things comparable to pre-2007?
IMO, our recovery will take time. Many people, like myself, just don't want to find themselves in a future predicament similar to this one just because they wanted to have something now, but willing to pay for it later.
"This is the clearest evidence of consumer deleveraging that we have. Consumers are actively saving more, borrowing less and paying back their credit card balances and other debt," said Zach Pandl, an economist at Nomura Securities International in New York.
"This is a positive thing in the long run, but in the short term it is negative for growth. People spending less means demand will be weaker and employment will be weaker."
While data indicate the economy started growing again in the third quarter after a recession that started in December 2007, consumer spending and a weak labor market remain the missing link to a sustained recovery.
www.reuters.com...
