"Those who cautioned against rising debt levels were dismissed as doom-mongers; after all, asset prices were rising even faster, so balance-sheets looked healthy. And with the economy buoyant, debtors could afford to meet their interest payments without defaulting. In short, it paid to borrow and it paid to lend. Like alcohol, a debt boom tends to induce euphoria. Traders and investors saw the asset-price rises it brought with it as proof of their brilliance; central banks and governments thought that rising markets and higher tax revenues attested to the soundness of their policies. Debt increased at every level, from consumers to companies to banks to whole countries. "
Source: The Economist
"This historic unfolding event can be examined and observed on many scales: individuals, cities, counties, states, regions, countries, and continents. The weakest stumble first."
Random Roving - February 3, 2009
Showing posts with label Great Contraction. Show all posts
Showing posts with label Great Contraction. Show all posts
Sunday, August 29, 2010
Sunday, August 8, 2010
The Great Abundance
I haven't shared a Peggy Noonan article in quite a while due to WSJ's decision to make it available only to subscribers. It appears that "the ban" has been lifted. An interesting recent article that I spotted on Twitter.
"Parents now fear something has stopped. They think they lived through the great abundance, a time of historic growth in wealth and material enjoyment. They got it, and they enjoyed it, and their kids did, too: a lot of toys in that age, a lot of Xboxes and iPhones. (Who is the most self-punishing person in America right now? The person who didn't do well during the abundance.) But they look around, follow the political stories and debates, and deep down they think their children will live in a more limited country, that jobs won't be made at a great enough pace, that taxes—too many people in the cart, not enough pulling it—will dishearten them, that the effects of 30 years of a low, sad culture will leave the whole country messed up. And then there is the world: nuts with nukes, etc. Optimists think that if we manage to turn a few things around, their kids may have it . . . almost as good. The country they inherit may be . . . almost as good. And it's kind of a shock to think like this; pessimism isn't in our DNA. But it isn't pessimism, really, it's a kind of tough knowingness, combined, in most cases, with a daily, personal commitment to keep plugging. They don't seem to know or have a sense of the mood of the country."
Entire Article http://online.wsj.com/article/SB10001424052748703748904575411713335505250.html
"Parents now fear something has stopped. They think they lived through the great abundance, a time of historic growth in wealth and material enjoyment. They got it, and they enjoyed it, and their kids did, too: a lot of toys in that age, a lot of Xboxes and iPhones. (Who is the most self-punishing person in America right now? The person who didn't do well during the abundance.) But they look around, follow the political stories and debates, and deep down they think their children will live in a more limited country, that jobs won't be made at a great enough pace, that taxes—too many people in the cart, not enough pulling it—will dishearten them, that the effects of 30 years of a low, sad culture will leave the whole country messed up. And then there is the world: nuts with nukes, etc. Optimists think that if we manage to turn a few things around, their kids may have it . . . almost as good. The country they inherit may be . . . almost as good. And it's kind of a shock to think like this; pessimism isn't in our DNA. But it isn't pessimism, really, it's a kind of tough knowingness, combined, in most cases, with a daily, personal commitment to keep plugging. They don't seem to know or have a sense of the mood of the country."
Entire Article http://online.wsj.com/article/SB10001424052748703748904575411713335505250.html
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