Selling to the Debt-Averse Consumer
by Eric Janszen
"...The Federal Reserve wants to reinflate the credit bubble and engineer a return to the old days. But that isn’t possible. When a nation’s businesses and households take on too much debt and the economy stumbles, the cash flow needed for financing dries up, defaults rise, and a vicious cycle of falling incomes, asset prices, and collateral values begins. That cycle ends only when asset prices, debt levels, and incomes get back into balance. Misuse of consumer credit is gone for good..."
"This recession marks the first recorded decline in household debt, ever."
Copyright © 2009 Harvard Business School Publishing Corporation. All rights reserved.
"...The Federal Reserve wants to reinflate the credit bubble and engineer a return to the old days. But that isn’t possible. When a nation’s businesses and households take on too much debt and the economy stumbles, the cash flow needed for financing dries up, defaults rise, and a vicious cycle of falling incomes, asset prices, and collateral values begins. That cycle ends only when asset prices, debt levels, and incomes get back into balance. Misuse of consumer credit is gone for good..."
"This recession marks the first recorded decline in household debt, ever."
Copyright © 2009 Harvard Business School Publishing Corporation. All rights reserved.
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