victor, you are right about folks spending up their equity. i know a guy who took $40k out of his equity and bought qcom at $100. he was not alone.
savings alone presents some issues. however, it is just a single tree in a forest of issues. does it exactly measure wealth? no way!
can some information be gleaned from its trend even though the absolute numer itself isn't the be all, end all? i think so. not perfect information, but some valuable information, nonetheless.
my assumption is that the savings rate will revert at least back the historical avg, as will debt, thereby constricting demand in the future. if you look at both savings and debt, we are in outlier regions and i don't see anything fundamental that has changed for good. i do see a stock market staring down disaster. NEVER in the history of the world, has a BUBBLE been sustainable. not only that, they invariably end in disaster. that disaster, imho, will casue folks to tighten their belt, furthering the disaster.
if folks don't agree, that is fine. but i'm custer and this is my last stand ;-) |
