Good news from the former U.S. Federal Reserve Chairman Alan Greenspan today in his remarks made in Tokyo. He does not think economic slowdown in the U.S. is probable, which is a tamer version of his warning made earlier in the week.
"It is possible we can get a U.S. recession toward the end of the year, but I don't think it's probable." The former Chairman went on to say, "things look reasonably good in the short run for the U.S. and the world." But "we can't assume that this extraordinary period of recovery can extend indefinitely."
Greenspan also went on to comment about the housing slump by saying the U.S. has "gone through the major part of adjustment" in housing prices and "the worst is over." Most economists agree that the slowdown in the housing market has only had a minor impact on the spending patterns of U.S. consumers.
The debate over the health of the housing market will continue for months. Home sales, delinquency and foreclosure rates, and inventory levels all will be closely watched to figure out what might happen next. The truth is no one knows, but everyone seems to be throwing their guess into the ring.
The state of the housing market and the state of the U.S. economy are both important, but maybe not as important as the state of your economy. How healthy is your budget, balance sheet, and savings rate? There are a lot of unknowns out there in the financial world and it is important to be ready for what might happen next. Based on your current housing expense, how much are you able to save each month? If you are like most Americans, you are saving less and trying to pay down debt.
Not sure what the weather will be like in your area this weekend, but our forecast calls for rain. It might be good for re-working the family budget and trying to spend less and save more. The ability to build savings and pay for life's little surprises with cash will help reduce your dependence on credit cards. Plastic is a great way to bag groceries but a bad way to buy them.