[oldfogey]

Some economic stats from publications I've read recently:

The US personal savings ratio has declined from 12% in 1982 to 1% now;
Household debt as a % of disposable income has risen from 64% in 1982 to 114% today;
Households' overall financial balance (the difference between gross savings and capital expenditure) has fallen to a record deficit of 3% of US gdp;
The US trade deficit in August widened to $54bn, and for all of 2003 it was $496.5bn.

You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.

PS The UK is no better!

[luvtolean]

Yep. Americans have always been bad. There are lots of reasons that manufacturing goes overseas, we spend more and more. I don't really feel like arguing about oil so I'll leave that alone...

It's seems to be a pandemic. As you say the UK is bad. When I was in Japan, a country notorious for its excellent financial habits, personal savings rates were at their worst in decades.....

[oldfogey]

Do we all buy on credit these days? In the past, I had always saved before buying a car or bike. House with mortgage, natch, but repaying that over time. Fogeyish behaviour.

Seems like with these stats everyone is buying on credit and never repaying their debt overall.

[dB]

My only outstanding debt is my mortgage, which by design would be manageable if I find myself working odd jobs. The 929 is pretty much my only extravagance (though I consider a bike of some kind a necessity ).

And let me tell you it's a lonely lifestyle around here. Most people I talk to about such things think I'm overly conservative.

[sheepofblue]

Plucked down cash for the RR, the dealer kind of freaked. Although there is a trend over here to be debt free that I think is becoming more fashionable so maybe there is hope.

[Heavy-Dee]

I for one am one of those people that are overly financed. The dilemma I was faced w/ is this.

1. New-ish out of college. My wife and I both make good money. Neighther of us really had much of anything.
2. Interest rates were/are so freaking low!!!
3. Buy now and go deep into debt vs. buy later and pay higher interest rates and therefore more in the long run.

Furthermore, and let's call this:

4. I can save and get about 2% on my investments. Screw that.

Now I'm at another impasse. Do I save less and pay off my debt, or do I continue slowly paying down the debt and slowly consistantly invest and save, build up a nest egg and pray that the market comes back?

I'm a "middle of the road" kind of guy, so I'm moving my debts to "good debts" and not putting all my eggs in one basket. I'm paying my debts (a little extra at a time) and continuing to save and (get crappy returns) right now.

HD

[Baketech]

Originally Posted by oldfogey

Some economic stats from publications I've read recently:

The US personal savings ratio has declined from 12% in 1982 to 1% now;
Household debt as a % of disposable income has risen from 64% in 1982 to 114% today;
Households' overall financial balance (the difference between gross savings and capital expenditure) has fallen to a record deficit of 3% of US gdp;
The US trade deficit in August widened to $54bn, and for all of 2003 it was $496.5bn.

You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.

PS The UK is no better!

Interesting numbers....but what do they mean....

[sheepofblue]

Originally Posted by Heavy-Dee

I for one am one of those people that are overly financed. The dilemma I was faced w/ is this.

1. New-ish out of college. My wife and I both make good money. Neighther of us really had much of anything.
2. Interest rates were/are so freaking low!!!
3. Buy now and go deep into debt vs. buy later and pay higher interest rates and therefore more in the long run.

Furthermore, and let's call this:

4. I can save and get about 2% on my investments. Screw that.
HD

To each his own but owing nothing feels sweeeet! Plus you are not factoring in risk. Also pay now low rate, pay later high rate, payoff now no rate

Edit: I am sure you have seen the poor souls that are out of work on the site. Now would you rather be unemployed with no house payment or with a paid for house? Extrapolate this to all other payments.

[Heavy-Dee]

Originally Posted by sheepofblue

To each his own but owing nothing feels sweeeet! Plus you are not factoring in risk. Also pay now low rate, pay later high rate, payoff now no rate

Edit: I am sure you have seen the poor souls that are out of work on the site. Now would you rather be unemployed with no house payment or with a paid for house? Extrapolate this to all other payments.

i don't disagree. However, our jobs are stable and I'm hell bent to make the most of my 20's. Extrapolate that!

[sheepofblue]

Originally Posted by Heavy-Dee

i don't disagree. However, our jobs are stable and I'm hell bent to make the most of my 20's. Extrapolate that!

Just a heads up from an old sheep no job is secure or all jobs are. But you seldom know in advance.

But either way good luck and with hard work you both will be fine.

[ND4SPD]

I was in the overfinanced group as well, still am but I'm making my way out of it. No major purchases until most of my debt is cleared 'cuz monthlhy payments suck!

[bubba]

Originally Posted by sheepofblue

Just a heads up from an old sheep no job is secure or all jobs are. But you seldom know in advance.

But either way good luck and with hard work you both will be fine.

government jobs are

[sheepofblue]

OK enough from me, think I will go back to plotting rides and chasing memory leaks

[WetShrub]

I survived my first year of (big bike) racing without any debt! YAY! But then again I was eating sack lunches and not spending money on anything else....and I didn't crash all year. Friends of mine that crashed a couple times this year are heavy in debt.

I don't think I could afford to race if I crashed regularly.

[luvtolean]

Originally Posted by oldfogey

You guys are buying too many foreign bikes on credit and filling their tanks with too much imported oil.

OK, I didn't touch this earlier, but now I'm awake and in a better mood so now I won't rant.

China imports more energy than the US. Carry on.

[RRWANTR]

Originally Posted by bubba

government jobs are

Kinda......

[oldfogey]

Originally Posted by luvtolean

OK, I didn't touch this earlier, but now I'm awake and in a better mood so now I won't rant.

China imports more energy than the US. Carry on.

Yep, but your monthly deficit with China was over $15bn last month! See anecdotal comments about buying chinese pocket bikes.

Originally Posted by baketech

..but what do they mean?

Wealthy (by global standards) US consumers feel relaxed about the future and are spending more than they earn on a consistent basis, increasing debts and selling savings. The rest of the world is having to finance that, so currently poorer Asians are lending US citizens billions of dollars, earned from selling goods to the US. Long term, US consumers have to reduce their spending below the overall rate of growth of the economy for a few years, either voluntarily, or forcibly.

[Baketech]

Originally Posted by oldfogey

Wealthy (by global standards) US consumers feel relaxed about the future and are spending more than they earn on a consistent basis, increasing debts and selling savings. The rest of the world is having to finance that, so currently poorer Asians are lending US citizens billions of dollars, earned from selling goods to the US. Long term, US consumers have to reduce their spending below the overall rate of growth of the economy for a few years, either voluntarily, or forcibly.

...and if we don't....

[luvtolean]

Originally Posted by oldfogey

Yep, but your monthly deficit with China was over $15bn last month! See anecdotal comments about buying chinese pocket bikes.

OK. You mentioned imported oil. People love to demonize the US over this. It's simply myopic to think the US is only at fault. I guess you figure you can't drive that bullshit point anymore, so now you wanna talk about pocket bikes which probably account for less than .0001% of the imports from China?

Wealthy (by global standards) US consumers feel relaxed about the future and are spending more than they earn on a consistent basis, increasing debts and selling savings. The rest of the world is having to finance that, so currently poorer Asians are lending US citizens billions of dollars, earned from selling goods to the US. Long term, US consumers have to reduce their spending below the overall rate of growth of the economy for a few years, either voluntarily, or forcibly.

Poorer asians are financing rich Americans?





OK, now that I have that out of my system let's clarify something. Whomever is financing "rich Americans" does it because they want to, not because they have to. You might have noticed interest payments are big, and there's a reason there's an international lending system....and it isn't because a rich person, asian or not, wants to lose his/her money!

You make it sound like if an American goes out and buys something on their Visa, some kid in Asia is gonna starve. Gimme a break.

Interesting you mention "forcibly". I understand some of the ramifications of the EU, and see how they love to drive their political agenda on a daily basis with sanctions. Fine.

I do believe the next real "war" will be a trade war. And I do believe it is people like you, who love to blame America, that will assure popular support for this trade war against the US. Whenever it does finally happen.

[oldfogey]

Originally Posted by luvtolean

Interesting you mention "forcibly". I understand some of the ramifications of the EU, and see how they love to drive their political agenda on a daily basis with sanctions. Fine.

I do believe the next real "war" will be a trade war. And I do believe it is people like you, who love to blame America, that will assure popular support for this trade war against the US. Whenever it does finally happen.

Me? I'm a capitalist Anglo-Saxon lackey, me!

Luvtolean and Baketech asked about my "forcibly" comment. Simply that at the moment, at current market prices, the Asians who have sold goods to US firms are happy holding their dollars in the US and buying american bonds (debt). Since the US is so big, what is a modest imbalance for the US is big for anyone else. So at some point those Asian holders of US debt get fed up with the rate at which their holdings of US debt are increasing and demand a much higher price to finance it. Either the dollar goes down relative to Asian currencies (likely) or US interest rates go up (less likely). This forces (economic identity) US savings to increase and spending to decline. Hence the "forcibly". No guns or EU rules involved, just good ol' free market forces.

The UK is in exactly the same position, having spent more than it's earned for several years in succession.

...and no, pocket rockets aren't the source of the deficit. They're an anecdotal example. Most electrical goods you buy are full of chinese components and every clothing shop has a strong chinese component to its stock.