Record plunge in consumer credit: so what?
Yesterday, the Federal Reserve reported that consumers reduced their debt by a remarkable $21.6 Billion during July. Click here for the story: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avvF5aNtrCfc
Bearish economists will seize upon this data to show that the consumer is retrenching; final demand will not grow; and the economy may lurch back into a sink hole.
Bullish economists will seize upon this data to show that consumers are finally behaving prudently, their balance sheets are being repaired, and the seeds are being sowed for a more-balanced, sustainable expansion.
Rocky will seize upon the data and say, “If you extrapolate the acceleration of this decline, consumers will be entirely debt free in a couple of years. That seems pretty unlikely.”
A picture is worth a thousand words: