Berman's Call - Consumer Credit

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The major question remains - will the spending we saw during Black Friday and Cyber Monday account for the bulk of consumer spending over the Christmas season?  In this video, Larry Berman talks about the enormous growth in consumer credit relative to the increase in the U.S. population.  Since the 1960's the average annual population increase has been roughly one percent.  The average increase in consumer credit has been eight times that - much faster than the rise in incomes.

Consumer credit is now declining.  While the great recession, and unemployment are big reasons for the decline, much of it can also be explained by demographics.  The average U.S. baby boomer owes a lot of money and is now at the age where they need a whole lot less stuff.  Their children have grown up, and they are past their peak spending years as they start to position for retirement (whatever form that takes).

Combine that with the need for governments and financial institutions to deleverage, and one has to wonder what the next catalyst to growth will be.  We have a huge Gen-Y gang just around the corner, but they are probably a decade away from filling the large, expensive shoes of the baby boomers.  I keep hearing about all that money on corporate balance sheets, but don't forget, the U.S. consumer accounts for about 70 percent of their economy.

What is your vote?  Are we going to see a big golden fourth quarter in retail in North America this year?