American households were traumatised by the Great Recession, which was the worst for 70 years, says Fortune's Geoff Colvin. They finally stopped shopping and paid some debt back after decades of borrowing and spending.
The absolute level of consumer debt fell from the 2008 peak of $12.3trn and has ticked up gently since around 2013 to a new high of almost $14trn. But the days of "debt-crazed" shopping are over. In terms of GDP, debt has kept sliding from a pre-crisis 99% to around 76% as overall growth has eclipsed the pace of household borrowing increases. And households now save a "prudent" 8.1% of their income. The personal savings rate plummeted to zero in 2006 and 2007.
Jim Rickard, Hard Assets Alliance
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