The Fed is desperately trying to stimulate credit and lending, but to no avail. Citing falling debt-service needs, some economists think consumers may be ready to go on a borrowing spree; they are badly mistaken. Today, credit-hungry adults under 45 are suffering the effects of a lackluster US economy. Shedlock discusses the four main reasons: Demographics; student debt; jobs and housing.
NEW YORK, NY – APRIL 13: Ben Bernanke (C), Chairman of the Board of Governors of the Federal Reserve System, prepares to speak on April 13, 2012 in New York City. The Fed chairman gave the keynote address at the ‘Rethinking Finance: New Perspectives on the Crisis’ conference held by the Russell Sage Foundation and the Century Foundation at the Princeton Club of New York. (Image credit: Getty Images via @daylife)
Factor in the rapidly slowing Chinese economy coupled with Europe in the midst of a severe recession, and it’s difficult if not impossible to see just where US growth will come from.
Nonetheless, Shedlock believes the market housing is bottoming. Even so, don’t expect either housing or the economy to go anywhere fast. Prospects for family formation are fundamentally weak and overall economic fundamentals are weak as well.
To read Mike Shedlock article: Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs
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