Debt Bubble

In general Americans are poorer today than they were at the turn of the century in 2000.

Since that time average household income is up about 14% but big ticket items like housing, college, health care, cars ate up much more.

In order to keep up we borrow and debt is at an all time high.  This is actually what one would expect as the population increases, but per capita debt has also risen significantly.

So a modest increase in income offset by significant increase in debt does not equate to a great economy.

It equates to a economy that is at risk.

The increase in debt is possible because we have seen interest rates kept artificially low.

Similar to previous periods when the economic elements get our of kilter, there is usually a dramatic adjustment.

That adjustment is needed to bring debt and incomes into balance.  It could be inflation, deep recession or something unpredictable, but these type of out of balance situations are not sustainable over the long term.

We have a debt bubble and it will pop.

Just when is the question?