[efarmer]

I guess it's only money. Thank God they are not in charge of a firing
squad instead. It would really get to you when they told you after you
were freshly shot:

"You guys need to really concentrate on creating some new life."

[yesplease]

$this->bbcode_second_pass_quote('Sixstrings', 'H')m.. so if Americans stop spending like they used to, then where does that leave our 70% service-based economy?

[Tyler_JC]

$this->bbcode_second_pass_quote('', 'B')oth the total FOR and DSR dropped while the unemployment rate decreased after the 80s recessions, so if you're really interested in a answer you should probably research those recessions.

[pup55]

Taking the other side of the equation for the moment, right now, if you are a holder of wealth, you are sad.

You would like to lend it to somebody so that they can buy a house, but the rates are so low that you cannot. You are not compensated for your risk (which is pretty high, since no one has any money) and you cannot get compensated for your inflation loss..... there is no reward for your deferred consumption. You also are dead afraid of inflation because you are worried that if you do loan it out, you will get paid back in less valuable dollars.

Back in the good old days, the 80's, rates were high enough that you would get compensated for those risks, so you were happy to clean out your bank account for some young couple who were willing to pay you 19 percent to buy a house.

So, you can guess what it will take to get you to lend your money out. Until that happens, you will either sit on your money, or get it out of cash by buying something interesting with it that will keep its value..

[yesplease]

$this->bbcode_second_pass_quote('Tyler_JC', 'I')nterest rates plummeted in the 1980s. Everyone refinanced their mortgages as rates kept falling.

These weren't small changes in interest rates either, some people were looking at a full halving of their interest payments between 1982 and 1990.

In today's environment, rates can only go up so households will NOT be able to refinance to more favorable rates. Anyone who still has a variable rate mortgage is going to get whacked as soon as interest rates return to their historic levels (let alone the rates we could see in a high inflation environment).

[Tyler_JC]

According to your link, consumer debt actually grew rapidly.

January 1981: $353 billion (growth from previous year)
January 1982: $375 billion (6.2%)
January 1983: $392 billion (4.5%)
January 1984: $442 billion (12.8%)
January 1985: $524 billion (18.6%)
January 1986: $605 billion (15.5%)

Unemployment kept on rising from 1980 to until the winter of 1982/1983.

From January of 1983 to January of 1984, unemployment dropped from 10.4% to 8%.

From January of 1984 to January of 1985, unemployment dropped from 8% to 7.3%.

Finally a drop from 7.3% to 6.7% in 1985.

It looks like we didn't see a serious drop in unemployment until consumer debt started exploding from 1983 onwards. Or maybe the increasing employment prospects from 1983 onward made people more confident to load up on credit card debt.

Regardless, 1980-1983 saw a relatively small increase in consumer debt (and indeed a drop in real terms) but that was coupled with a wrenching increase in unemployment and a major economic recession.

1983-1990 was a solid economic expansion (lots of job creation) but came with a big increase in debt of all kinds. Consumer debt in nominal terms doubled during this period. In inflation adjusted terms, the increase was still well over 50%.

(not to get us off topic but I felt the need to address this fully)

[yesplease]

$this->bbcode_second_pass_quote('Tyler_JC', 'A')ccording to your link, consumer debt actually grew rapidly.

January 1981: $353 billion (growth from previous year)
January 1982: $375 billion (6.2%)
January 1983: $392 billion (4.5%)
January 1984: $442 billion (12.8%)
January 1985: $524 billion (18.6%)
January 1986: $605 billion (15.5%)

[Outcast_Searcher]

$this->bbcode_second_pass_quote('yesplease', 'T')he data seems to indicate that Americans can save more while UE drops. Course, a recovery from recession tends to result in more debt, but it doesn't have to AFAIK. It can help, but recoveries can still occur w/o an increase in consumer debt.

[threadbear]

$this->bbcode_second_pass_quote('Ferretlover', '')$this->bbcode_second_pass_quote('lateStarter', 'T')his quote caught my attention: $this->bbcode_second_pass_quote('', 'G')eithner said the U.S. could not force Europe to boost domestic demand to adapt to the new economic reality, but he saw it as the only viable strategy to guarantee lasting growth

[yesplease]

$this->bbcode_second_pass_quote('Outcast_Searcher', 'T')his (the early 80's) was the beginning of the era of massive use of credit cards. In the modern American economic era, consumer spending IMPLIES debt, and lots of it.

[deMolay]

Tim you have swallowed lots of meat in your career lets see you gorge yourself for the cameras on seal blubber and other Canadian treats. This is priceless. He will be almost Canadian. He gets to stay in a trailer and really chew the fat on the shores of the Arctic Ocean. Tim some advice. You being the type that likes to gorge on the meat. Make sure somebody on your team knows the Hindlick Maneuver. Could save your life. And beware of the 300 pounders http://www.financialpost.com/news-secto ... id=2513934

[Revi]

I thought it was pretty remote having the G-7 in Canada the first time, but I guess it wasn't remote enough.

http://en.wikipedia.org/wiki/Iqaluit

[deMolay]

Definately will be no Terrorist challenges. His biggest challenge will be staying out of the clutches of the 300 lb Inuit Throat Singers. http://www.youtube.com/watch?v=qnGM0BlA95I

[Rod_Cloutier]

I wouldn't be so sure about no terrorism in Canada. I'm a Canadian and PETA (our the biggest domestic terrorism organization) is very active here.

[mos6507]

$this->bbcode_second_pass_quote('Repent', 'I') wouldn't be so sure about no terrorism in Canada. I'm a Canadian and PETA (our the biggest domestic terrorism organization) is very active here.

[zoidberg]

lol what terrorist actions has Peta been in?

[Rod_Cloutier]

PETA was up here two years ago after a guy was beheaded and dismembered on a Greyhound bus by a mentally disabled man. They used the insident to highlight the point, 'why is this so shocking we do this to animals for meat everyday'. This created a local uproar.

They also used the recent olympic torch relay stop thru our city as a publicity stunt to highlight there concern about seal hunting in Canada. The city I live in is an agricultural and transportation city, we don't hunt seals here, never had. It was bizarre to drive by their protest on the olympic torch relay day to see a giant inflatable seal the size of an office tower set up on the torch relay route. (This also created a local uproar).

PETA has been throwing cream pies in the face of all of our prominent politicians for years in a vain attempt for publicity at all cost. What they are really doing is trying to limit democracy and free speech by interrupting it. (This also created a local uproar last week as a prominent politican called this domestic terrorism).

[Pretorian]

$this->bbcode_second_pass_quote('Repent', 'P')ETA was up here two years ago after a guy was beheaded and dismembered on a Greyhound bus by a mentally disabled man. They used the insident to highlight the point, 'why is this so shocking we do this to animals for meat everyday'. This created a local uproar.

[Revi]

I think this is the last meeting of the G7. I wonder what they are talking about.

Nunavut in February. Not exactly the tourist season.

[zoidberg]

$this->bbcode_second_pass_quote('Pretorian', '')$this->bbcode_second_pass_quote('Repent', 'P')ETA was up here two years ago after a guy was beheaded and dismembered on a Greyhound bus by a mentally disabled man. They used the insident to highlight the point, 'why is this so shocking we do this to animals for meat everyday'. This created a local uproar.