The Velocity of Debt Hits the Wall!

As we head into the holiday weekend, & a snowy one for us in Minnesota at that (ick!), I find myself pondering another layer of this credit crisis.

For as many years as I can remember, it sure was easy to move debt from one lender to another.  Wasn't it?

How about all that flipping of balances from one 0% interest credit card to another?  Or, how easy it was to flip your mortgage financing from one loan to a new one.  This was widespread from the consumer level all up to the former big wigs (I'm thinking Bear Stearns)!  Everyone fell prey to it.  It can be argued our government is the all-time leader in this game.

However, this is a like a children's game of hot potato.  What happens when the velocity of this constantly swirling sea of debt stops?  Your stuck with what you have, that's what!

The new economics we are moving into will be very debt-averse.  Human behavior will change.  How excited are you these days to bring on more debt?  I bet not as eager as your were only 12 months ago!  I'm sure not.

Have a great holiday.  Spring is right around the corner, right?

BG