A Generational Shift In Attitudes To Debt?



Britain’s last generational shift: The 1980s Miners Strike:

m07-mine1-480.jpgSource of picture: www.wsws.org

 

My late parents hated even the concept of debt – let alone the insanely irresponsible error of actually borrowing money.

This is not surprising as my father could remember, when he was a boy, queuing for free food handouts during the Great Depression.

My mother was slightly less poor when she was a child (but still poor by any normal Western modern-day standards), but believed in thrift just as fervently.

Their attitudes were shaped both by the Great Depression and the deprivations of Great Britain during and immediately after the Second World War.

So when I ran up an overdraft of few hundred pounds Sterling when I was student they were less-than-impressed – especially as the bank manager phoned to ask for my cheque book and cheque-guarantee card back!

Their approach to debt, aside from an expensive passion for beer when I was a student, is ingrained.

Despite my fascination with commodity and financial markets, I would rather observe from the sidelines.

The question now – as the West still struggles to cope with high levels of personal debt left over from the current crisis – is whether we have undergone another generational shift.

Quite possibly, thinks Paul Hodges of International eChem.

A whole generation has grown up with easy and cheap money being the norm and markets and assets only heading, on the whole, in one direction – that’s up, of course.

In Britain, the last big shift in attitudes to debt and spending began back in the 1980s with the Thatcher revolution.

Millions of council tenants started buying homes for the first time and dabbling in shares, as the very nature of British society moved away from collectivism towards a greater “me” culture.

Financial deregulation also took place on both sides of the Atlantic and bubbles were kept inflated by central banks.

The rest, as we know, is very painful recent history.

How will the children of parents now facing foreclosures, personal bankruptcies and long-term unemployment respond over the coming decades? Will they start keeping their money beneath the proverbial mattress?

Can we also expect a permanent shift to more prudent forms of banking?

What will this mean for growth in chemicals demand?

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