Households and businesses have been reducing debt for a couple of years. But the debt has simply morphed into government debt. But in Europe and the U.S. we’re getting close to debt reduction time, or what’s being referred to as the “fiscal cliff”.
Soon we will be deliberating the possibility of experiencing debt deflation. Austerity is
Continue reading Debt Deleveraging – is Debt Deflation Coming?
The unemployment rate is dropping, but not fast enough for many. Jobs affect household spending and are needed to pay down household debt. Jobs affect the well-being of families and their ability to achieve goals.
So how do we address the unemployment issue? Unemployment can be cyclical (as the economy improves, employment goes up) or structural.
Continue reading Our Unemployment Rate – Do We Have a Structural Jobs Problem?
The perception that women are scarce leads men to become impulsive, save less, and increase borrowing. Research shows us that women have expectations of how men should spend their money when courting. Their expectations increase as the ratio of men to women goes down.
Some of our behaviors, including saving and spending, are much more reflexive and
Continue reading Men Spend More and Save Less to Find a Mate
Income inequality is largely explained by education equality – high school dropouts vs. college grads.
But growing income inequality is explaining the growing debt inequality.
The top 5% saw their share of total income rise to 34% in 2007, up from 22% in 1983. This excludes capital gains, which pump up the income of the rich even
Continue reading Income Inequality Affecting Debt Inequality
What are the financial predictors of happiness? We could look at metrics related to debt, spending, hours worked, percent of income saved, travel industry sales…so many to pick from.
Steven Kaplan, a professor of entrepreneurship and finance at the University of Chicago Booth School of Business, believes unemployment rates are better than income inequality in predicting
Continue reading Unemployment Correlated With Happiness – Steven Kaplan: Implications for Education and Personal Growth
Most Americans want to spend less money, according to Gallup polling organization. Families continue to monitor spending closely but aren’t making meaningful changes in cutting back their spending.
While families manage their household budget and spending, behavioral psychology has found that spending money does not make people happier. Gallup polling data indicates that families’ sense of
Continue reading Income Buys Satisfaction, Not Happiness – the Value of Intrinsic Goals
How do we make money in our investing when debt is being constrained?
That’s the question Bill Gross, Managing Director of PIMCO, asks. He answers by saying that we need to avoid financial assets and, instead, invest in real assets.
Bill explains that during the “Great Leveraging of the past 30 years, it was financial assets with
Continue reading Where to Invest in a Debt Reducing World? Real Assets, Says Bill Gross
Some smart money is betting that there will be more accommodation to lower interest rates and get more people working. After all, it is an election year. Federal Reserve Chairman Ben Bernanke is defending the central bank’s policy of very low interest rates. Verbally believes that “further significant improvements in the unemployment rate will likely
Continue reading Debt Reduction, Not Education, Skills Issues, Biggest Employment Problem – Bernanke
Acquiring more education is not only associated with more income but is also associated with greater happiness.
A couple of years ago a survey was conducted in the U.S. to find out what caused people to become angry. The survey found that young people, parents with children at home, and people with less education had a
Continue reading Reduce Anger and Increase Happiness with Education
With spending and investment portfolios declining in the midst of a household debt contraction our chances of going into recession are rising.
Household spending fell in June for the third straight month; never in the past five decades has this happened outside of a slump.
The Standard & Poor’s 500 Index plunged 16.8 percent in 11 days,
Continue reading Spending and Investments Decline, Chance of Recession Rises