U.S. Consumers Are Engaging In A Historic Debt Binge, And Delinquencies Are Ominously Rising…


Americans are going into debt as if tomorrow will never come, but of course tomorrow always arrives eventually.  What we are witnessing right now is truly a historic debt binge, and to many of the experts it seems like there is no end in sight to the unrestrained spending that is going on.  But are U.S. consumers going into record levels of debt because they are feeling good about things or because they are trying to survive in an increasingly harsh economic environment?  In America today, the cost of living has become exceedingly oppressive, employers are laying off large numbers of workers, and poverty and homelessness have been absolutely exploding all over the country.  Millions of U.S. households are just barely hanging on by their fingernails, and many desperate consumers have been piling up debt in a frantic attempt to stave off the inevitable.

According to new data that was just released by the Federal Reserve, consumer borrowing increased much faster than expected during the month of December…

US consumers did not rein in their spending this past holiday season, and now have near-record-breaking debt balances to show for it, according to new Federal Reserve data released Monday.

Consumer borrowing spiked by $23.75 billion in November, more than doubling economists’ expectations for a $9 billion increase and sending outstanding credit balances north of the $5 trillion mark for the first time on record, the Fed’s latest Consumer Credit report showed.

The monthly increase during the critical holiday shopping month was driven by higher rates of revolving credit (which includes mostly credit cards), which soared by nearly $19.5 billion — the third-highest monthly increase on records that go back to 1943.

For quite a while, U.S. consumers were able to handle rapidly rising debt levels, but now it appears that we are reaching a breaking point.

In fact, we are being told that “delinquencies are at their highest level since 2012”

However, the sharp increase in credit balances is starting to be a cause for concern, Ted Rossman, Bankrate senior industry analyst, told CNN via email.

“Credit card usage and Buy Now, Pay Later usage seemingly surged during the holidays, on top of already hefty debt loads,” Rossman said. Now, delinquencies are at their highest level since 2012.

In 2012, we were just coming out of the Great Recession.

Those were very painful days.

And actually the average credit card interest rate is even higher than anything that we witnessed back then…

The average credit card rate is now more than 20%, on average — an all-time high — after rising at the steepest annual pace ever, in step with the Federal Reserve’s interest rate hike cycle.

“Most cardholders’ rates have risen five-and-a-quarter percentage points during that span as a result of the Fed’s rate hikes meant to combat inflation,” Rossman said. “It’s no wonder, then, that we’re seeing more people carrying more debt for longer periods of time.”

Piling up credit card debt can be fun, but high interest rates will absolutely suffocate you financially for many years to come.

Unfortunately, one recent survey discovered that 56 million cardholders in the United States have been carrying balances “for at least a year”

Nearly half, or 49%, of credit card holders carry debt from month to month on at least one card, up from 46% last year, the report found, and 56 million cardholders have been in debt for at least a year.

Avoid credit card debt if you can, because it is literally financial poison.

Of course many Americans have no choice.  More than 60 percent of the nation is living paycheck to paycheck, and just trying to pay the bills from month to month is really a struggle for millions upon millions of Americans.

Our leaders insist that they have inflation under control, but we can all see that is not the case.

This week, a restaurant owner that charges 16 dollars for a BLT sandwich made headlines all over the nation, but because of rapidly rising costs he only makes 2 dollars on each sandwich

A restaurant owner has explained how raging inflation means he has to charge $16 for a BLT sandwich – yet makes under $2 on each.

Brian Will, boss and founder of Central City Tavern sports bar chain, decided to speak out after a pal confronted him over his sandwich prices.

The ingredients – bacon, lettuce, tomato, mayo and bread – cost $5, up more than a dollar since three years ago.

I still remember the days when a trip to the grocery store would cost me about 20 bucks.

Now 20 bucks will buy one sandwich.


Sadly, the economic outlook for the year ahead is not promising at all.

According to Business Insider, economist Cam Harvey is very confident that a recession is coming in 2024…

Cam Harvey, the economist who discovered the Treasury yield curve’s ability to forecast recessions, is reiterating his call that a downturn is likely ahead in 2024.

Harvey’s model says that when yields on 3-month Treasury bills stay higher than those on 10-year notes for at least three months — triggering an official inversion — a recession will follow. The indicator has preceded each of the last eight recessions and has not produced any false positives.

Yields on the two government bond durations have been officially inverted for 12 months now.

I can’t argue with his analysis.

But what we are facing in the long-term is not just another economic downturn.

Ultimately, what we are facing in the long-term is a “perfect storm” that will result in a complete meltdown of our entire system.

The tremendous economic turmoil that we have been experiencing during the Biden administration is just the beginning.

All of the long-term trends are pointing in one direction, and the consequences of decades of very foolish decisions are starting to catch up with us very rapidly.

Michael’s new book entitled “Chaos” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.


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