We know that people around the world are traveling again. U.S. travel exports are up, and the airlines are having a solid year (relative to 2009, at least). Meanwhile, two years after the financial crisis erupted only a few miles from where I sit now, people are spending money again. Consumer credit is once again the culprit, as Black Friday deals touted financing with long periods of interest-free money use.
Favorable deals are enticing consumers who don’t really have the money to spend, but they’re lured in by offers that are “too good to be true.” As Newsweek reports, “Old habits die hard.”
Consumer debt by household is down, and savings habits are on the rise, but the increase in spending from a consumer base so recently battered does make me wonder what comes next. Is borrowed money going to fuel growth in retail, consumer product and travel sectors, as it did through 2007? Is this a house of cards that’s waiting to collapse (yet again) when easy money dries up and the consumers find themselves as squeezed as they did in 2009?
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