NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
Oldbabe, I am of the same opinion. And following is an excerpt from a BusinessWeek article with some numbers.
The bursting of the credit bubble suggests that the U.S. and global economies have a growth problem as well as a debt problem. According to the official numbers, economic growth in the U.S. has averaged 2.7% over the past 10 years. But by BusinessWeek's calculation, U.S. consumers have run up about $3 trillion in excess borrowing and spending over the same period—consumption that was not justified by income growth. Without that boost, which translated into new homes, cars, furniture, clothing, and the like, U.S. economic growth would have come in considerably lower. The global boom, too, was artificially fueled by out-of-control borrowing by consumers and businesses.
So, we will have to work off the excess. It may take longer to recover than past recessions. It means gloom, but not necessarily doom. So, I am prepared for a lean year or two, but not running for the hills.
One way debt loads can be alleviated is with a bit of inflation. Dirty word indeed, but imagine how mortgages currently "under water" can become afloat with a little bit of the "I" thrown into the economy?
PS. I am slowly buying back the shares that I got stopped out off. I believe in equities, but in the long run, and will keep reminding myself to be patient. Still, I will keep many yearly expenses of cash (I only have I-bonds, and just a bit of corporate bonds). I was never more than 70% in stocks, and it seemed to work for me. Down to 30% in stocks now. Deliberate selling earlier in the year brought it down to 50%. Then stop loss orders and price dropping did the rest.
The bursting of the credit bubble suggests that the U.S. and global economies have a growth problem as well as a debt problem. According to the official numbers, economic growth in the U.S. has averaged 2.7% over the past 10 years. But by BusinessWeek's calculation, U.S. consumers have run up about $3 trillion in excess borrowing and spending over the same period—consumption that was not justified by income growth. Without that boost, which translated into new homes, cars, furniture, clothing, and the like, U.S. economic growth would have come in considerably lower. The global boom, too, was artificially fueled by out-of-control borrowing by consumers and businesses.
So, we will have to work off the excess. It may take longer to recover than past recessions. It means gloom, but not necessarily doom. So, I am prepared for a lean year or two, but not running for the hills.
One way debt loads can be alleviated is with a bit of inflation. Dirty word indeed, but imagine how mortgages currently "under water" can become afloat with a little bit of the "I" thrown into the economy?
PS. I am slowly buying back the shares that I got stopped out off. I believe in equities, but in the long run, and will keep reminding myself to be patient. Still, I will keep many yearly expenses of cash (I only have I-bonds, and just a bit of corporate bonds). I was never more than 70% in stocks, and it seemed to work for me. Down to 30% in stocks now. Deliberate selling earlier in the year brought it down to 50%. Then stop loss orders and price dropping did the rest.
Note: American's had better learn to LWYM (Live Within Your Means) -- I suspect our friends overseas will be a bit more savvy next time around.
ROFL!! You crack me up, Sarah! 
