The shivers reach the middle class as cheap credit dries up
When cheap credit runs out, the middle class that bragged about trips starts to tremble. The iPhone at 48 euros a month is no longer a luxury, it's a mortgage.
English · Original discussion in Spanish · Published
Financing a washing machine over 15 years: the luxury of the poor who didn't know they were
Barely a month ago, the same people now tearing their clothes over the price of eggs and petrol were showing off trips, dinners and new cars. The turnaround is as abrupt as it was predictable. The official CPI may gloss over reality, but the instalments on an iPhone at 48 euros for 84 months don't lie. When the cheap credit party ends, the middle class living paycheck to paycheck starts to tremble.
The iPhone at 48 euros a month: the thermometer of household debt
A recurring anecdote in this analysis is that of a young woman financing her iPhone at 48 euros a month for what seems like an eternity. It's not an isolated case. Aspirational consumption has been built on instalments that seem manageable but, added together, devour any margin for saving. When inflation bites, financing for durable goods is the first thing to break. From flights to Punta Cana in instalments to a washing machine over 15 years, it's a short step.
Those who don't show off: quiet wealth versus the flexers
Against the easy-credit narrative emerges the figure of those who have but don't flaunt. Some amass properties or collections of luxury cars, yet dress like a regular at the local bar. The paradox is that real capital doesn't need to be displayed. Meanwhile, the new poverty disguises itself as an iPhone and designer sneakers. The gap between real wealth and visible consumption has never been so wide.
The question hanging in the air is not whether prices will keep rising, but how many of those financing their lifestyle today are one crisis away from having to finance the basics.
Related debates in the forum
Barely a month ago, the same people now tearing their clothes over the price of eggs and petrol were showing off trips, dinners and new cars. The turnaround is as abrupt as it was predictable. The official CPI may gloss over reality, but the instalments on an iPhone at 48 euros for 84 months don't lie. When the cheap credit party ends, the middle class living paycheck to paycheck starts to tremble.
The iPhone at 48 euros a month: the thermometer of household debt
A recurring anecdote in this analysis is that of a young woman financing her iPhone at 48 euros a month for what seems like an eternity. It's not an isolated case. Aspirational consumption has been built on instalments that seem manageable but, added together, devour any margin for saving. When inflation bites, financing for durable goods is the first thing to break. From flights to Punta Cana in instalments to a washing machine over 15 years, it's a short step.
Those who don't show off: quiet wealth versus the flexers
Against the easy-credit narrative emerges the figure of those who have but don't flaunt. Some amass properties or collections of luxury cars, yet dress like a regular at the local bar. The paradox is that real capital doesn't need to be displayed. Meanwhile, the new poverty disguises itself as an iPhone and designer sneakers. The gap between real wealth and visible consumption has never been so wide.
The question hanging in the air is not whether prices will keep rising, but how many of those financing their lifestyle today are one crisis away from having to finance the basics.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (42 replies).
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