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August 30, 2009 – Comments (1)

Financial Armageddon has a list of recommended blogs.

I went to check out Sudden Debt and the graph got my attention.  The level of household debt was almost constant throughout my childhood and my early years of developing my perceptions of what the world would be like for my adult years.  During the 80s I was figuring out what I wanted to do and in university and the debt level jumped 50%.  I suspect that debt level was not uniformly gained, but taken on disproportionately by younger people.

This whole debt thing was only possible by lowering interest rates, making people into debt servicing slaves.  Something that a lot of people miss about higher interest rates is that a little effort in concentrating on reducing debt go a long way and with low rates enormous effort doesn't get you very far at all.  The asset price inflation is simply a false sense of wealth that enslaves younger people.  You still only own say a house, but if you didn't buy it before the inflation you are a debt slave.

1 Comments – Post Your Own

#1) On August 30, 2009 at 7:18 PM, dwot (45.58) wrote:

I don't like doing back to back blogs so I will just add a comment...

In Naked Capitalism  I got a kick out of the end, "Yves again. The other reason to take this gloomy appraisal seriously is that in the Great Depression, it was the big exporter (the US) that faced the most difficult adjustment. Overconsuming indebted countries in Europe simply defaulted."

 I think this time it will be the US that defaults...

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