hardmanb

Economic Crisis: Good Luck Europe, You'll Need It

The "pre-bubbles" US had a (service-economy) GDP of $7.4 Trillion consisting of 71% consumer spending.

The service economy, understandably is contracting in free-fall. The bottom has fallen out of consumer spending with the Housing equity collapse; housing lending collapse; credit card consumer credit collapse; and catastrophic rise in unemployment.

Europe and Asia's economies and budgets were balance on exports to the US and consumption (however unwise) of US citizens.

This was unsustainable, is increasingly ceasing, and US consumers will reduce consumption and borrowing. After the shocks of our "great recession" Americans for decades are and will be switching from consumption to savings...a generational change in psychology and habits.

Those who depended on American consumption to balance their budgets are in for big trouble, for a long time.