Comments on: Weak consumer spending will last for years http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Anonymous http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56855 Anonymous Tue, 18 Aug 2009 13:07:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56855 It will be interesting to see if a redistribution of personal assets takes place and further aggravates the excess in capacity. Households in the United States are holding substantial inventories of assets which are not only unused, but have real carrying costs attached to them. Not just ATV's and personal watercraft sitting, rusting in driveways, but stuff -- piles of stuff -- sitting unused in storage. There is currently ten square feet of personal (rental) storage for every living American. Crammed with stuff which clearly not used -- but which might be useful to someone else. As thrift becomes more urgent it is reasonable to assume that households will ultimately do the same thing that businesses are doing now -- reduce inventories. The stuff that comes out of inventories may materially replace supplies of new stuff which might otherwise come out of currently idle production capacity. Who knows? It will be interesting to see if a redistribution of personal assets takes place and further aggravates the excess in capacity. Households in the United States are holding substantial inventories of assets which are not only unused, but have real carrying costs attached to them. Not just ATV’s and personal watercraft sitting, rusting in driveways, but stuff — piles of stuff — sitting unused in storage. There is currently ten square feet of personal (rental) storage for every living American. Crammed with stuff which clearly not used — but which might be useful to someone else. As thrift becomes more urgent it is reasonable to assume that households will ultimately do the same thing that businesses are doing now — reduce inventories. The stuff that comes out of inventories may materially replace supplies of new stuff which might otherwise come out of currently idle production capacity. Who knows?

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56848 Edward Harrison Mon, 17 Aug 2009 20:35:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56848 ranger, one could argue that this is exactly why Japan has been in depression for years - demographics. his will make it harder for the U.S. Other places I know that are demographically challenged include Russia, Germany and Italy. The whole of Europe and North America suffer here, Europe more and NA less. ranger, one could argue that this is exactly why Japan has been in depression for years – demographics. his will make it harder for the U.S. Other places I know that are demographically challenged include Russia, Germany and Italy. The whole of Europe and North America suffer here, Europe more and NA less.

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56847 Edward Harrison Mon, 17 Aug 2009 20:33:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56847 Stevie, I think the Fed has definitely proved they will do anything they can to beat back the spectre of deflation - anything. So, yes, I agree 100% that the Fed will do what it takes to prevent deflationary forces from taking root. This is one reason the destruction of the currency is a very real issue. Stevie, I think the Fed has definitely proved they will do anything they can to beat back the spectre of deflation – anything. So, yes, I agree 100% that the Fed will do what it takes to prevent deflationary forces from taking root. This is one reason the destruction of the currency is a very real issue.

]]> By: Anonymous http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56845 Anonymous Mon, 17 Aug 2009 11:55:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56845 Good report! BTW, when the baby boomers retire and cut spending, the reduction in consumer spending will be further exacerbated. This also affects equity markets as boomers will get more and more conservative and spend their investments (sell) for living expenses. Good report!
BTW, when the baby boomers retire and cut spending, the reduction in consumer spending will be further exacerbated.
This also affects equity markets as boomers will get more and more conservative and spend their investments (sell) for living expenses.

]]> By: Stevie b. http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56844 Stevie b. Mon, 17 Aug 2009 08:06:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56844 Ed - thanks for this post - it's a cracker! Do you think it unreasonable to say that the PTB will never allow deflation of any consequence to take hold for any meaningful length of time? Don't you feel "they" will come up with all sorts of wizard wheezes, not excluding negative interest rates? And it's not like the US will be ploughing a lone furrow - don't you think every developed economy will be at it in a currency race to the bottom? This will surely mean higher basic raw resource prices for us all...but equally surely we can't know the timescale for all this inevitability to unfold, except that it will be sooner rather than decades. Ed – thanks for this post – it’s a cracker!

Do you think it unreasonable to say that the PTB will never allow deflation of any consequence to take hold for any meaningful length of time? Don’t you feel “they” will come up with all sorts of wizard wheezes, not excluding negative interest rates? And it’s not like the US will be ploughing a lone furrow – don’t you think every developed economy will be at it in a currency race to the bottom? This will surely mean higher basic raw resource prices for us all…but equally surely we can’t know the timescale for all this inevitability to unfold, except that it will be sooner rather than decades.

]]> By: Anonymous http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56841 Anonymous Mon, 17 Aug 2009 01:51:00 +0000 http://www.creditwritedowns.com/2009/08/weak-consumer-spending-will-last-for-years.html#comment-56841 Great analysis! Great analysis!

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