The spigot will be tightened very tight over the next couple of years. Creditors will increase Credit Card rates to back fill their losses in the housing market, making it even more impossible for credit whores to pay down their debt.
I spoke to an older neighbor yesterday and she was explaining to me how much things have changed. When she and her husband bought their house in 1955, they put 50% down and paid it off in 10-years. They never used credit cards. People who drove fancy cars were rich. They owned their cars and were not making payments every month. She said, it’s obvious, those that look rich today are really only up to their eyebrows in credit debt and will never be able to retire.
It made me think, ouch!! America has built a pyramid scheme on credit. Now that the one cash cow, the house, is maxed out. All the other lambs are going to come calling. In other words, if you owe, you are going to owe even more over the next few years. If you cannot make your payments now, just wait. This pyramid scheme is collapsing.
A statement from a friend of mine that manages one of the Westfield Shopping Centers here in SD told me last night over the phone that he has never seen such a significant drop in retail sales at a shopping center than what he has seen in the last two month at his.
So yes, the siphon is slowly being cut. If you were a surfer waiting for a wave, and the wave being the housing and economy crash, the wave would just being reaching visibility on the horizon. Just before the point where you start to paddle towards the wave so that you are in a position where it won’t crash. So I would think that in the next 6 months, the wave will be starting to stand up and if you don’t know how to surf (you don’t have real cash savings, under you mattress), you’re going to end up like Eddy. You did it and didn’t make it home to talk about it.
