- Joined
- Aug 30, 2007
- Messages
- 13,881
A worthwhile read .. key points:
There is no question that restoration of normal credit lines to small and medium-sized businesses is absolutely crucial if we are to prevent this financial tsunami from washing away enterprises so important to our economy. But restoring personal credit is another matter.
..
As political leaders urge consumers to return to shopping malls and auto dealerships with patriotic messages such as: "Show confidence in your country"; the question is, "With what?" Consumers have been living beyond their means during a decade-long shopping spree fuelled by debt. Zero equity mortgages, house flipping, multiple maxed out credit cards and deferring car payments until next year regardless of your credit rating drove average household debt in the United States and Britain to almost twice disposable income, the highest in the world. Canadian household debt is quite a lot lower at 1.4 times, but even this doesn`t tell the whole story.
...
If this weren`t bad enough news for the retail, auto and housing sectors, there`s the demographic reality that population growth is stagnant in the United States and Canada and is falling in Western Europe and Japan. And then there`s the silver tsunami. The over-60 age group in these countries is expected to increase to more than 25 per cent of the population during the coming payback decade. As people approach retirement, they spend less because they`ve already accumulated what they need and are more frugal with their retirement funds.
The bottom line is that consumer markets in Western developed countries have peaked, and will never again return to their former level.
...
All the more reason for our Conservative government to resist knee-jerk calls for even more spending before the ink is dry on the last deficit-bulging budget.
..
And raise your hand if you think that living with a little less stuff doesn`t have to mean living less.
==> Govern your debt levels & buying decisions accordingly !
Full article here:
http://business.theglobeandmail.com/servle...y/Business/home
There is no question that restoration of normal credit lines to small and medium-sized businesses is absolutely crucial if we are to prevent this financial tsunami from washing away enterprises so important to our economy. But restoring personal credit is another matter.
..
As political leaders urge consumers to return to shopping malls and auto dealerships with patriotic messages such as: "Show confidence in your country"; the question is, "With what?" Consumers have been living beyond their means during a decade-long shopping spree fuelled by debt. Zero equity mortgages, house flipping, multiple maxed out credit cards and deferring car payments until next year regardless of your credit rating drove average household debt in the United States and Britain to almost twice disposable income, the highest in the world. Canadian household debt is quite a lot lower at 1.4 times, but even this doesn`t tell the whole story.
...
If this weren`t bad enough news for the retail, auto and housing sectors, there`s the demographic reality that population growth is stagnant in the United States and Canada and is falling in Western Europe and Japan. And then there`s the silver tsunami. The over-60 age group in these countries is expected to increase to more than 25 per cent of the population during the coming payback decade. As people approach retirement, they spend less because they`ve already accumulated what they need and are more frugal with their retirement funds.
The bottom line is that consumer markets in Western developed countries have peaked, and will never again return to their former level.
...
All the more reason for our Conservative government to resist knee-jerk calls for even more spending before the ink is dry on the last deficit-bulging budget.
..
And raise your hand if you think that living with a little less stuff doesn`t have to mean living less.
==> Govern your debt levels & buying decisions accordingly !
Full article here:
http://business.theglobeandmail.com/servle...y/Business/home
