by John Rubino, Dollar Collapse:
The past decade’s historically low interest rates convinced millions of Americans to buy cars they could only afford with hyper-cheap credit. This made auto sales one of the drivers of the recovery, but it also left far too many people with underwater “car mortgages” that will limit their spending on other things and prevent them from buying their next car until sometime in the 2020s.
Like all artificial (that is, credit-driven) booms, this had to end eventually, and it’s looking like now is the time:
U.S. Auto Makers Post Sharp Sales Decline in June
(Wall Street Journal) – Detroit’s car companies reported steep sales declines in June, capping a bumpy first half of the year for the U.S. auto industry and setting a bleak tone for the summer selling season.