The music has stopped. Shareholders are not holding very much, and anyone without a seat is in a vast majority. Wealthcare reform is in session, and consumers are putting their heads down on their debt, shrinking credit card spending, and bringing borrowing to a crocodile metabolism.
An atlatl is a labor-saving device that allows a user to throw something much faster much farther, like a credit card that allows you to buy something you cannot immediately afford—it extends your purchasing power. But no one is throwing credit around these days. Consumers are instead de-leveraging themselves, reducing their amount of revolving credit at a rate of 13% annually.
A crocodile can stay under water for two hours without coming up for air, reducing its heart rate to 2 or 3 beats per minute, and it can live for 115 years. That is where nonrevolving consumer credit is now. Nonrevolving consumer credit includes auto and student loans and has slowed to a 1.5% annual rate.
While consumers have embraced more primitive forms of spending, that is not necessarily helpful in the modern world, seeking rapid economic recovery. Consumer spending makes up about 70% of the US gross national product. Conservative attitudes towards spending and borrowing contribute to a slower ballad of recovery, but may better support long-term growth.
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