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The National savings rate dipped into negative territory last year.

The last time that we had bottomed to such rates was 1933, in the depths of the Depression.

What does this say about the future?

Contrast this statistic and compare it to what is happening in housing equity and bank card credit.

Americans have exhausted most of their equity in their homes and with slowing demand, it looks like Americans will have to find other sources for equity. The other avenue has always been the credit card. However, lenders are tightening up! and most lenders are over their limits. Together, tightening credit combined with a negative savings rate is not encouraging and not a positive indicator of the health of the American economy..

Clearly, American wage-earners seem to be running out of possible options
as the base costs for energy, food and health care costs continue to soar...

Expect to see a rash of home sales in the coming twelve months and further dislocations if these prognostications are correct ..

Les Aaron
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