Everyone's busy arguing over whether we're going to have a "V" shaped recovery or a "W" shaped recovery (or an "L" shaped recovery). I've no greater clue than anyone else, but regardless of how it falls out, the similarity of our situation to that of Japan in the previous decade augurs for a double-dip at least, before anything long-run-positive occurs. If the boffins are right and we're going to have a rallying economy for the next year or so before the double-dip danger really rears its head, then this presents a much needed breather for households to repair their balance sheets and maybe accrue some savings. A second dip would likely be more violent than the first, as the "true disbelievers" would have all been shaken out by then, so savings cushions will be critical -- I don't know what the macro trend is looking like, but we're doing exactly what the average Japanese consumer did in the '90s: welding our wallets shut. Sure, it was bad for their retail sector and will be awful for ours (with commercial real estate to fall right on it's heels), but with baseline unemployment running 16%, deflation rampant and with equal risks of stag-disinflation and stagflation to follow, who cares?
But I'll take the breather.
5 comments:
Also time for us to recover before we have to start selling plasma again to make ends meet.
Hopefully most people will indeed build up savings and pay down debt, but I don't see it happening especially if the drive to continue having profits is enabled through continued job cuts.
Well, I am paying down hard on all remaining debt (not much now) and rolling up the cash for savings. Gonna be tough with munchkin in route, but I have a cunning plan...
To take over the world? :D
Mike (or is your name S. Baldric?) - you'll find that the costs for a little one are a bit exaggerated. Sure you have an additional mouth to feed, but as someone who pulled it off with a graduate student salary it can be done on the cheap without compromising quality of life. Just don't fall into the trap that you need a whole bunch of baby gadgets and you'll be fine. Plus this is the first child - you'll get lots of gifts for the 1st. The 2nd child however is considered old hat and doesn't get nearly as much from relations and the grandparents.
Heh, all good points. No my cunning plan is classified, so if it works I'll brag about it after the fact.
Post a Comment