Denninger is the quintessential Angry Man of our time, only he isn't some goofball middle-aged guy living in his mom's basement ranting about how unfair the world is in general, and to him in particular.
This man knows his math, his history, and knows how to make a chart that demonstrates both math and history.
Recently, he shared his reasoning that there is no real economic recovery. He lays out his reasoning here. And his chart.
He tells us that until The Consumer begins to spend again, we're not in for much of a recovery, and he's probably right on that point. The Consumer is not out buying stuff. He's busily paying down debt as fast as he can. An 18% year-over-year drop in consumer credit. That's some 14 billion dollars gone away from last year, i.e. money not spent on goods or services.
That's not good news for anyone looking for things to turn around quickly, out here in the real world, on-the-ground economy.
But it really is good news, because as families dump their debt, (hopefully to zero), they will begin to buy again, with cash. Their lack of fear of the future just might bring some sense of confidence back, cuz people who aren't deeply in debt can face the world knowing that they need never be hostages again.
They will also develop a lack of tolerance for their elected representatives, who think that restraint of spending is for losers.
And that could be the really good news!
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