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| Image via thedigeratilife.com |
It’s difficult to say whether liquidations will rise or fall
in the coming year. Both sides of the debate offer compelling arguments in
their favor, and no clear winner can be determined.
On the one hand, there are powerful factors indicating our
economy may be starting a slow gradual upswing. 2011 wasn’t a great year
economically but it ended stronger than it started, with U.S. salaries rising
in December of 2012 for the first time in 9 months. Consumer spending has begun
to rise over the last couple of months, and while it’s growth hasn’t been
dramatic, any growth is better than obvious stagnation. Unemployment is still a
problem, holding strong at 10%, but it isn’t rising and there’s no indication
it will do so anytime soon.
Overall the economy isn’t fantastic, but it has been much
worse in recent years, and it isn’t showing any signs of getting worse in the
immediate future. If the economy stays in essentially the same state it’s in
right now, then we probably won’t see a sharp spike in liquidations during
2012.
That being said, there are a few indications that
liquidations could take a turn upwards over the next year, depending on a few
key factors. Americans have spent a couple years now saving money and paying
down their debt, but the rise in consumer spending seems to indicate that those
same Americans are starting to spend their savings discretionarily, and may be
beginning to accumulate debt once more to help finance those purchases. Many
Americans have also responded to the recent Recession by going back to school
and furthering their education, accumulating additional student loans in the
process.
The big wildcard in 2012 is going to be the price of gas,
which continues to rise and may drag the price of everyday goods along with it.
If the cost of living increases dramatically over the coming year, then
Americans will find their cash-flow choked and could easily succumb to their
increased debt load.
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