Say Hello to Frugality

8 Oct

The Australian share market lost $56 billion in value today after a horror session on Wall Street over night pushed stocks to an all time low. While a lot of Australian commentators have been busy scribing their best doomsday scenarios (reminiscent of the scenes above), it was refreshing to read a piece on Treehugger quoting David A. Rosenberg, the North American Economist for Merrill Lynch:

“As far as I know, there are only two ways to eliminate debt. You either walk away from it, which people obviously are doing, which is why we got these write-downs and these foreclosures, or you pay it down. I think people [are going to start paying down debt]. That means that the savings rate is going to be forced higher. This, again, is going to be very, very disinflationary. It means that fashions are going to change. It means frugality is going to set in. We’re going to be living in smaller houses, driving smaller cars and living more frugally. It’s not going to be the end of the world; it’s going to be a necessary process to truly embark on getting the balance sheets down to more comfortable levels so that we can actually embark on the next cycle”.

While this is a non-consensus viewpoint, it’s simplicity holds true. To think that the current economic crisis may slow our culture’s escalating acquisitiveness with a more sustainable frugality gives me a warm fuzzy feeling.

But, if you still can’t find the bright side in the market meltdown – then scope out my favourite blog ju jour: Sad Guys on Trading Floors. It lives up to it’s title and turns the economic crisis into one of those clever internet memes. Lots of funny pictures of Gordon Gekko-types looking stressed with even funnier commentary. Hell, when life gives you lemons, you just gotta make lemonade!

[via Treehugger]

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