Nowadays we are engendered with the illogical feeling that old is no good. We are so bombarded with out with the old and in with the new that we fall for this consumerist trick. We have been though current economic climate may not support this for much longer offered outstanding incentives to get into debt. The continual nationwide increase in house prices has put so many people into an apparently sell a pension situation that they have been able to borrow heavily on the equity and get into large debts. The offers of interest free credit cards has led more and more people into the buy now, pay later culture.
Interest rates have wavered, putting less disposable cash in the pocket of the average man or woman. It is reported that many lenders are imposing far stricter criteria on any new loan applications and that credit card companies are even reducing some people's credit limits. The implications are a potentially huge hit to corporate earnings and the economy. Companies will be forced to pony up more to keep their pension funds adequately funded while even consumers not encumbered by lots of debt will be likely to raise their savings rate to compensate for lower returns, thus acting as a drag on consumption. With extremely low or negative interest rates and everyone from consumers to banks trying to shed debt and assets at the same time, what seemed like reasonable projections for a mixed portfolio of stocks, bonds and other assets are now substantially too high.
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