Ignoring Bad News

Today, a report came out with the numbers for Americans’ savings rate for all of 2006 and the numbers aren’t good.  For an entire year, Americans had a negative savings rate meaning we spent all of our disposable income and even dipped into savings or borrowed to spend some more.  This makes the second year in a row that we had a negative savings rate, something that hasn’t happened since the Great Depression.

Contrary to prevailing thoughts, most debt is still bad, especially high interest no collateral debt.  When the housing market corrects (and I’m positive it will), the American economy (and hence the world economy unless China and India really step up) will be in serious trouble.