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| A 9 Trillion dollar consumer household debt in a 15 year period will cause a lot of economic excitement.
http://www.research.stlouisfed.org/fred2/series/CMDEBT?cid=97
This time period was a credit driven economy. This started in 1996 when there was an institutional change in mortgage financing. Anyone could go anywhere and finance a home or get a credit card. A car salesman would tell you I have 50 places I can finance your car for you. And, everyone around the world, they couldn't wait to buy our paper because the American dollar was as good as Gold.
If I can find them, there are other charts showing the business and public sector debt increases and their percentage of the ever increasing yearly National GDP. Now it is payback time. We have all been there, one year of bad crops, and it takes some income from good future crops to pay back the one year of unpaid far debt. That is extra income we could have used for improvement of our own operations and standard of living.
There are articles being written about the long term 10 to 20 year effects of the economic pay down of our National, and World wide debt and the dampening effect it will have on future economic growth. My local economic barometer is the Kenworth truck plant about 5 miles away. In their peak, about 120 trucks a day, during the last year, 60 to 70 trucks a day, 3 day work week. Had heard the orders were falling, 2 Sundays ago the corporate jets arrived at the local airport. I told some it is a bad omen when the corporate people fly in on a Sunday for a meeting. Friday, 290 laid off, future orders are not there to continue present level of production. Have some local banker friends and I joke with them, "have some customers sitting on parked money and getting no return on it" They reply "Yes and they are in no hurry to buy anything". On the Ag side, crops are 50% of last year and the irrigated crops are down 30%. At least the prices are good and most AG people are in a good equity position.
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Kyle Bass says the subprime mortgage was not the cause of the problem but the effects
