Economic recovery......by Rico

There has been a lot of 'chatter' in economic circles about a consumer-led recovery being just around the corner.

As unemployment figures (the reported numbers, not the actual numbers which are running double-plus the released figures) rise this has been somewhat muted, but it is still humming in the background.

It makes me mindful of the words said to me by a Chinese businessman (we were discussing the potential market for consumers in China): "In order to BE a consumer, you first have to have money."

Discounting what has happened to 'net worth' in America in the wake of the housing "bust" let's look at consumer debt. Specifically household indebtedness vs consumable income:

- in the 1960's the ratio was 55%
- by the 1980's it was 65%

- BY 2007 it was 133%!!!!!

- TODAY it hovers at 130%

A consumer-led recovery just is not going to happen. There is a lot of 'debt load' that has to be paid-off/unwound before emptying our pockets at the box stores saves the economy.

I KNOW!!! Listen to Team Obama's plan to RAISE TAXES just as you're trying to cut your debts!
- That'll work a treat.........