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Reply #7: When this little phenomena's going to hurt.. [View All]

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CoffeeCat Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-06-11 12:49 PM
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7. When this little phenomena's going to hurt..
It's nice that people have the extra money. If they're losing their homes--I'm glad that people have a 1-2 years with that extra
cash to sort out their finances.

However, the problem is---if people are simply going out and spending recklessly at Target, Pier One and Pottery Barn--and if this spending
is partially propping up the US economy right now--then we are in for an economic shock when this trend dies.

What happens to these people after their rent-free 1-2 years has passed? They have to find somewhere to live. They'll be paying a mortgage
or rent again and the costs associated with that expense. Their extra cash will have dried up.

I really hope that, on a macro level, people are using this time to pay OFF their credit cards and other debts--so they're in a stronger
financial position when they're out of a home.

If they suddenly feel, "I'm rich!" and wildly spend on eating out at restaurants, buying expensive cars and other non-essentials--they'll
be in a worse place than they were when they couldn't pay the mortgage. They'll be deeper in debt AND without a home.

Man! Our economy is one big shell game right now...with some mirrors and wires thrown in!
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