Ben Young

Not Your Grandpa's Deflation

We were informed that our Advanta small business card is going belly up on May 31st. This eliminates credit line of $30,000. Our Home Equity Line of Credit was rescinded which eliminated $125,000 of credit. We appealed that decision, and it was rescinded, but I wager that of the 10s of thousands of Heloc removals, ours was one of the very very few that were reinstated. An Exxon card we rarely used was cancelled. Thus, while our net worth and FICO score have actually *improved* over the last year, our credit/ PLVOM (personal latent velocity of money) available dropped by over 80%. Our family is also saving 20% of income. We learned our lesson in the dot.com collapse when I was out of work for 1.5 years.

...and, at the same time, I find that there's nothing I really want to buy. The family has 3 cars that are of high quality, a house that suits and more computers/TVs than I know what to do with.

What have I bought recently? tooth implants. This "filled" a real honest to god unmet need. There is an ocean of unmet need in regenerative medicine...but I DEFINITELY do not need yet another car.

So, credit is truly disappearing even for the well-to-do, savings are increasing for those who can, there's little in the way of "gotta have" purchases, all implying continued drops in velocity of money on the consumer side...and that's for people who still have jobs/assets.