In April credit card debt was once again the largest contributor to the new all-time high in consumer debt, increasing by $7 billion vs. a decline of $2 billion in March. Student loan and auto debt hit all-time highs of $1.6 trillion and $1.16 trillion, respectively. I found the credit card debt numbers interesting because a report released by Experian showed that 23% of Americans need credit card debt to pay for food and rent – i.e. make ends meet.
The Achilles Heel of the U.S. economic and financial system is debt. Easy credit artificially stimulated the U.S. economy (and global economy) for the last 8 years. Most households are running out of their capacity to take on more debt, which means consumption – 70% of economic activity – is going to contract.
Rethinking The Dollar invited me to discuss the trade war, the economy and precious metals and why stock market catastrophe is baked into the cake:
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I noticed today that mortgage applications have risen in the
past four weeks. My immediate thoughts were that these
applications were not for home purchases, most likely Re-Fi
applications. Looking and feeling like 2008 again, pull whatever
equity you have in your home and pay down those high interest
credit cards. Americans are repeating the same mistakes.
Actually, today was the first week in the last 4 that purchase mortgage apps rose from the previous week. And that number
is “seasonally adjusted” so who knows how accurate it is. Not surprising cuz rates have plunged
Great interview Dave. I hope you are right about gold going up…we’ve been waiting for a while.