Debt and Income

Domestic total credit market debt divided by pre-tax personal income and corporate profits.

Domestic debt to pre-tax personal and corporate income.

While staring at this chart, it occurred to me why someone like David Stockman could be so upset at a system he helped to construct.  Wages and salary represent the flow of currency, the common form of money.  Stocks and bonds prices represent the intended currency value of a that particular asset.

For example, say that every household in the United States has enough assets to pay-off a home mortgage.  So what happens when it comes time to pay-off the mortgage and everyone tries to sell their assets to pay their mortgage?  What if they are similar assets?  In any case, everyone is looking to sell and not buy.  So, who is doing the buying?