Quote du Jour: U.S. private debt decline in perspective
Today’s quote du jour comes courtesy of Comstock Partners.
“We find it incredible that there was not one quarterly decline in household debt since 1952 (as far back as we could find data) until the third quarter of 2008 from where we’ve had 12 consecutive quarterly declines. We didn’t even have one quarter of decline during the worst recessions since the Great Depression (up until the recent financial crisis in 2008) in 1973-74 and 1981-82 — NOT ONE!! During the period 2000 to 2008 household debt rose from 68% of GDP to 100% of GDP. But, since the 3rd quarter of 2008 we have had 12 consecutive quarterly declines as total household debt declined by almost $1 trillion.
“Now that the credit binge has ended, we expect consumer demand to continue declining. As consumers continue to be retrenched, we expect the household debt to decline below $10 trillion from $13.3 trillion now. With the deprivation of this consumption power that has been the backbone of the U.S. economy for the past 75 years, the economy can be expected to enter a double-dip recession.”
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