Monday, September 13, 2010

Postponable Purchases

From Bonddad: Brodero has been commenting here for some time. I have always been impressed with his insights and asked him to post regularly. He has graciously accepted my invitation, so expect to see his posts from now on.

For what it is worth....

Postponable Purchases are essentially Housing,spending on durable goods such as cars and

business investment in equipment and software. Here are a few facts....

Postponable Purchases to Gross Domestic income is currently 17%.The 40 year average for this ratio is 21%. Interestingly Postponable Purchases exceeded the 21% level from 1995 to 2006 to a cumulative tune of 5.3 trillion.Since 2006 we have been below the 21% level to ( currently)

a cumulative tune of around 5.3 trillion. Postponable Purchases total today at 2.455 trillion. 1.074 trillion durable goods,1.023 trillion business investment and 358 billion residential investment. Gross Domestic Income is 14.433 trillion as of the second quarter.