>Optimists claim there is nothing to worry about, because the
>increase in debt has been more than matched by an increase in
>financial assets. On the surface, balance sheets do indeed look
>healthy. Households’ net wealth (assets minus debt) has increased
>from just under five times personal disposable income in 1990, to a
>historic high of more than six times.
People, including the skeptics at The Economist, always forget the fact that different sets of households have the assets from those that owe the debts: the rich lend to those poorer than they are.
Doug