ePAROL - Economic News and Views

Debt Levels Rising to the Sky

Stephen Church of Piscatasquaresearch.com, in his essay at PrudentBear.com entitled: "Consumer Crunch Update", writes:

"The latest 2005 economic statistics show that consumers depended on new debt for more than 90% of their cash flow during 2005. Most new consumer cash flow now comes from new debt."

"Consumer liquidity has resumed its downward trend. Liquidity has fallen to 3 weeks of funds on our preferred measure. Consumer money supply now flows backward."

"Historically, household incomes were sufficient to generate a cash surplus after consumption and debt service. Now, households have a large cash deficit."

posted by G @ 4:26 PM