http://www.marketwatch.com/News/Story/Story.aspx?column=economic+report&siteid=mktw&dist=
This is part of the deleveraging process (consumers paying down debt. . .or banks writing off bad debts). The long run “solution” to this problem is for the consumer to rebuild his/her balance sheet. Debt & consumption have driven this economy, but it should be savings & investment that drives the economy in the long run. Just look at China. . .large manufacturing/exporting country, over $2 trill (roughly) in foreign currency reserves. The U.S. is borrowing from the rest of the world (ex. Japan and China – largest holders of US Treasuries) to sustain its economic growth. This is unsustainable……UNLESS, somehow the government policies in place (to fight deflation) create hyper-inflation, which could mean rising ASSET prices down the road. The US/global economy has depended on rising asset prices. In 2008 the global financial markets experienced massive ASSET PRICE DEPRECIATION. It’s difficult to borrow against a declining asset because your equity shrinks. Ever received a margin call? Not fun!