Posted by
Conrado Brenna on Sunday, June 14, 2009 11:21:47 AM
As the first quarter of the year soon comes to its end, the
household wealth plunged down with a $1.3 trillion deficit; the biggest
downturn ever since 1952, when quarterly household wealth was kept in record.
As stocks slowly emerge, yet still have their ups and downs, and the housing
market and house prices are very low, the average American household has lost a
very big part of what makes up its own wealth. Even though this might seem very
bad, the American people are now having different points of view towards how to
spend their money, saving their money more than ever, due to the new tax breaks
from the Obama administration and the stimulus plans, imposing much more
government control. As Christopher Low put it, “it is going to be very
difficult to have any recovery in consumer spending without jobs and incomes
recovering first”. However, retail sales rose in May for the first time in
three months, mainly because of U.S. shoppers buying new cars and looking for
bargains due to the rising price of gasoline. What are we going to see in the
future? Probably, people saving their money more, making less purchases and
more conservative investments, in the struggle to keep up with the economic
depression. There is no doubt that tough times are ahead.