They say one should never bet against the US consumer and given how much interest rates have increased so far it is amazing to see how consumption in Europe falters while Americans just continue as if nothing happened.
Americans learned from 2007/2008 not to trust floating rate debt.
About ~40% of US homeowners are mortgage free. For those that have a mortgage, the median mortgage rate is 3.5% (with 95% of mortgages under 5%). The benefits of having 30yr fixed debt!
The 2nd largest expense (auto) is also fixed debt which helps too.
True that. Here in the UK, the average fixed term is less than five years which is why we are already in recession while the Us consumer is moving along nicely.
It is of interest, but no surprise. Our respective ‘world views’ are formed by our experiences - mainly during formative years - say 11 to 21.
b.1951 I had parents who lived harder lives but who escaped from hardship. My mother was accepted for a scholarship to London University at age 18, but her (foster) parents stopped it: “You will just be married when you reach 21yo”, married women being regarded as brainless dependants. As such she encouraged me to learn from young age onwards. For that I remain grateful. My father could not relate (he never went to school) but was supportive. The state funded all my tuition fees and a maintenance grant of £360 p.a. I was so much more fortunate than young people today (“Nicholas is having a gap year before Oxford”; “Mary works in a care home 50 hours a week for minimum wage looking after Nicholas’s grandparents”.)
My views decades on? Stop deceiving young people with ‘Micky Mouse’ degrees and re-create shorter vocational courses; all funded by the state (we pay it back many times in higher taxes on higher earnings); in popular culture value work, saving & self betterment, community and family. Individualism, relativism & loss of basic morality are a disaster. Social media are the work of the devil. Recognise climate change and deal with it (see Jeremy Grantham, also of my era) and stop the hypocritical playing with promotion of EVs etc. Elect a government with the vision & commitment of 1945-51. [Rant over, but there is substance there].
The implications of the research are that UK & USA in the 2050s will reflect the mores of today. I have greater faith in young people, but our current society does not help them - Will that lead them to react against it? I hope so for their sake.
Americans learned from 2007/2008 not to trust floating rate debt.
About ~40% of US homeowners are mortgage free. For those that have a mortgage, the median mortgage rate is 3.5% (with 95% of mortgages under 5%). The benefits of having 30yr fixed debt!
The 2nd largest expense (auto) is also fixed debt which helps too.
True that. Here in the UK, the average fixed term is less than five years which is why we are already in recession while the Us consumer is moving along nicely.
It is of interest, but no surprise. Our respective ‘world views’ are formed by our experiences - mainly during formative years - say 11 to 21.
b.1951 I had parents who lived harder lives but who escaped from hardship. My mother was accepted for a scholarship to London University at age 18, but her (foster) parents stopped it: “You will just be married when you reach 21yo”, married women being regarded as brainless dependants. As such she encouraged me to learn from young age onwards. For that I remain grateful. My father could not relate (he never went to school) but was supportive. The state funded all my tuition fees and a maintenance grant of £360 p.a. I was so much more fortunate than young people today (“Nicholas is having a gap year before Oxford”; “Mary works in a care home 50 hours a week for minimum wage looking after Nicholas’s grandparents”.)
My views decades on? Stop deceiving young people with ‘Micky Mouse’ degrees and re-create shorter vocational courses; all funded by the state (we pay it back many times in higher taxes on higher earnings); in popular culture value work, saving & self betterment, community and family. Individualism, relativism & loss of basic morality are a disaster. Social media are the work of the devil. Recognise climate change and deal with it (see Jeremy Grantham, also of my era) and stop the hypocritical playing with promotion of EVs etc. Elect a government with the vision & commitment of 1945-51. [Rant over, but there is substance there].
The implications of the research are that UK & USA in the 2050s will reflect the mores of today. I have greater faith in young people, but our current society does not help them - Will that lead them to react against it? I hope so for their sake.
Great article JK.