{"id":1450876,"date":"2024-01-16T11:30:00","date_gmt":"2024-01-16T16:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1450876"},"modified":"2024-01-16T11:30:00","modified_gmt":"2024-01-16T16:30:00","slug":"us-consumers-are-engaging-in-a-historic-debt-binge-and-delinquencies-are-ominously-rising","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/us-consumers-are-engaging-in-a-historic-debt-binge-and-delinquencies-are-ominously-rising\/1450876\/","title":{"rendered":"US Consumers Are Engaging In A Historic Debt Binge, And Delinquencies Are Ominously Rising…"},"content":{"rendered":"

US Consumers Are Engaging In A Historic Debt Binge, And Delinquencies Are Ominously Rising…<\/span><\/p>\n

\n

Authored by Michael Snyder via The Economic Collapse blog,<\/em><\/a><\/p>\n

Americans are going into debt as if tomorrow will never come, but of course tomorrow always arrives eventually.\u00a0<\/strong> 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.\u00a0 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?\u00a0 In America today, the cost of living has become exceedingly oppressive, employers are laying off\u00a0large numbers of workers<\/a>, and poverty and\u00a0homelessness have been absolutely exploding all over the country.\u00a0 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.<\/p>\n

<\/a><\/p>\n

According to new data that was just released by the Federal Reserve, consumer borrowing increased\u00a0much faster than expected<\/a>\u00a0during the month of December\u2026<\/strong><\/p>\n

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.<\/p>\n

Consumer borrowing spiked by $23.75 billion in November, more than doubling economists\u2019 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\u2019s latest Consumer Credit report showed.<\/p>\n

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 \u2014 the third-highest monthly increase on records that go back to 1943.<\/p>\n

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.<\/strong><\/p>\n

In fact, we are being told that\u00a0\u201cdelinquencies are at their highest level since 2012\u201d<\/a>\u2026<\/p>\n

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.<\/p>\n

\u201cCredit card usage and Buy Now, Pay Later usage seemingly surged during the holidays, on top of already hefty debt loads,\u201d Rossman said. Now, delinquencies are at their highest level since 2012.<\/p>\n

In 2012, we were just coming out of the Great Recession.<\/p>\n

Those were very painful days.<\/p>\n

And actually the average credit card interest rate\u00a0is even higher<\/a>\u00a0than anything that we witnessed back then\u2026<\/strong><\/p>\n

The average credit card rate is now more than 20%, on average \u2014 an all-time high \u2014 after rising at the steepest annual pace ever, in step with the Federal Reserve\u2019s interest rate hike cycle.<\/p>\n

\u201cMost cardholders\u2019 rates have risen five-and-a-quarter percentage points during that span as a result of the Fed\u2019s rate hikes meant to combat inflation,\u201d Rossman said. \u201cIt\u2019s no wonder, then, that we\u2019re seeing more people carrying more debt for longer periods of time.\u201d<\/p>\n

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

Unfortunately, one recent survey discovered that 56 million cardholders in the United States have been carrying balances\u00a0\u201cfor at least a year\u201d<\/a>\u2026<\/strong><\/p>\n

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.<\/p>\n

Avoid credit card debt if you can, because it is literally financial poison.<\/p>\n

Of course many Americans have no choice.\u00a0<\/strong> 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.<\/p>\n

Our leaders insist that they have inflation under control, but we can all see that is not the case.<\/p>\n

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\u00a0only makes 2 dollars on each sandwich<\/a>\u2026<\/p>\n

A restaurant owner has explained how raging inflation means he has to charge $16 for a BLT sandwich \u2013 yet makes under $2 on each.<\/p>\n

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.<\/p>\n

The ingredients \u2013 bacon, lettuce, tomato, mayo and bread \u2013 cost $5, up more than a dollar since three years ago.<\/p>\n

I still remember the days when a trip to the grocery store would cost me about 20 bucks.<\/strong><\/p>\n

Now 20 bucks will buy one sandwich.<\/p>\n

Ouch.<\/p>\n

Sadly, the economic outlook for the year ahead is not promising at all.<\/strong><\/p>\n

According\u00a0to Business Insider<\/a>, economist Cam Harvey is very confident that a recession is coming in 2024\u2026<\/p>\n

Cam Harvey, the economist who discovered the Treasury yield curve\u2019s ability to forecast recessions, is reiterating his call that a downturn is likely ahead in 2024.<\/p>\n

Harvey\u2019s model says that when yields on 3-month Treasury bills stay higher than those on 10-year notes for at least three months \u2014 triggering an official inversion \u2014 a recession will follow. The indicator has preceded each of the last eight recessions and has not produced any false positives.<\/p>\n

Yields on the two government bond durations have been officially inverted for 12 months now.<\/p>\n

I can\u2019t argue with his analysis.<\/p>\n

But what we are facing in the long-term is not just another economic downturn.<\/strong><\/p>\n

Ultimately, what we are facing in the long-term is a\u00a0\u201cperfect storm\u201d<\/a>\u00a0that will result in a complete meltdown of our entire system.<\/p>\n

The tremendous economic turmoil that we have been experiencing during the Biden administration is just the beginning.<\/p>\n

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.<\/strong><\/p>\n

*\u00a0 *\u00a0 *<\/p>\n

Michael\u2019s new book entitled\u00a0\u201cChaos\u201d<\/a>\u00a0is now available\u00a0in paperback<\/a>\u00a0and\u00a0for the Kindle<\/a>\u00a0on Amazon.com, and you can check out his new Substack newsletter\u00a0right here<\/a>.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 01\/16\/2024 – 06:30<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

US Consumers Are Engaging In A Historic Debt Binge, And Delinquencies Are Ominously Rising… Authored by Michael Snyder via The Economic Collapse blog, Americans are…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1450876","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1450876"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450876\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1450876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1450876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1450876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}