Saturday, October 15, 2005

Something Has Got to Give!

In this Washinton Post article called "Double Whammy", they nicely discuss the squeezing of the American consumer of the past 5 years. Inflation is accelerating at the fastest pace in 15 years, yet incomes are down over the last five years. Something has to give. It is mathematically impossible for prices to go up and wages to go down forever. Only the housing ATM has allowed consumers to continue spending at a fast pace for the last 5 years. What will happen when the ATM shuts down? We are the proverbial frogs in a tub with the temperature rising slowly. Will we be cooked? Obviously with consumer sentiment being so low, people are feeling the pain. Yet, we have no savings to fall back on. How can this possibly end well??



Post a Comment

<< Home