Kass: Many Challenges Still Ahead

This blog post originally appeared on RealMoney Silver on June 29 at 8:02 a.m. EDT.

There is now an almost universal acceptance that last fall we were on the eve of financial destruction, and both the Federal Reserve Chairman and Bank of America (BAC Quote) CEO confirmed as much in last week's Congressional testimony.

By virtue of massive monetary and fiscal stimulus, Armageddon was avoided and the world's stock markets have launched a spirited second derivative rally that has contributed to a collective sigh of relief.

The surfeit of consumption and the overindulgence in the credit and debt markets, however, are residues that argue in favor of a long-lived transformation in consumer behavior, much like our parents and grandparents endured after The Great Depression.

This time it is truly different:

• Most notably, the personal savings rate will remain elevated, and personal consumption expenditures will be deflated for an extended period of problem.
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