For how long do you think this consumer-fantasy will last? At some point, reality will set back in.
It’s not about psychology. It’s about a lack of money. Right now, so many people aren’t paying their debts, so they have money/credit to spend. How long do you think that will last? If it lasts for a long time, and if there are no negative consequences for the deadbeats, at some point, the few remaining responsible people will throw in the towel and default on their debts as well.
Over the past few years, the irresponsible have been bailed out at the expense of the responsible, and everybody knows it. On one hand, some complain about our deficits, but on the other, they complain if asset prices fall. They can’t seem to understand the correlation between the two. Those deficits are a direct result of our propping up the prices of worthless assets.
