When the going gets tough, it can be extremely tempting to pile on debt as a solution. The cost of living is rising much faster than most of our paychecks are, and this is putting an enormous amount of financial stress on hard-working Americans. But rather than cutting back on spending, a lot of people are choosing to deal with that financial stress by going into more debt. In fact, we just learned that U.S. household debt reached an all-time record high of 16.9 trillion dollars last quarter…
Total US household debt hit a record $16.9 trillion during the fourth quarter, an increase of $394 billion, or 2.4%, from the prior three-month period, according to the Fed’s latest Quarterly Report on Household Debt and Credit. While the lion’s share of the debt is attributable to mortgages, the report showed that not only are credit card balances swelling at record levels, delinquencies are on the rise as well.
In particular, Americans are turning to credit card debt like never before.
According to CNN, in the fourth quarter credit card debt in the United States increased at the fastest pace ever recorded…
Credit card balances increased nearly 6.6% to $986 billion during the quarter, the highest quarterly growth on record, according to New York Fed data that goes back to 1999. Year over year, credit card balances grew 15.2%.
This is not a good idea.
When the economy is slowing down, going deeper into debt is one of the worst financial mistakes that you can make.
But millions of Americans are doing it anyway.
It is inevitable that lots of them will ultimately get behind on their payments, and the latest numbers show that this is already starting to happen…
The share of credit card users making payments that were at least 30 days late, also known as early delinquencies, rose last quarter to 5.9% from 5.2% in the prior quarter. The share of serious credit card delinquencies, which represents payments that are 90 or more days late, rose to 4% last quarter from 3.7% in the prior quarter.
The New York Fed is telling us that a whopping 18.3 million Americans were behind on their credit card payments at the end of 2022.
At the end of 2019, that number was sitting at just 15.8 million.
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Things are definitely moving in a very troubling direction.
Unfortunately, many Americans have little choice at this point. Approximately two-thirds of the country is living paycheck to paycheck, and now a lot of us are being swamped by bills that we simply cannot afford to pay.
For example, one homeowner in California was absolutely horrified when he was hit by a $907.13 utility bill…
Brent Eldridge had heard that prices for natural gas were high this winter, but nothing prepared him for how bad it could be.
When he opened the envelope from Long Beach’s utility department, he couldn’t believe the total: $907.13, nearly eight times higher than his bill at the same time last year.
“It made me want to puke,” said Eldridge, 48, a pastor.
Millions of others are being slammed by similar bills this winter.
Meanwhile, the price of food continues to soar to ridiculous heights.
Sadly, food prices will not be returning to where they once were, and so we are being told that the solution is to literally eat less food. Earlier this week, the Wall Street Journal actually posted an article entitled “To Save Money, Maybe You Should Skip Breakfast”.
Skipping meals to make ends meet?
This is how badly Biden’s economy is beating down average Americans.https://t.co/WJegLYW5UN
— John Kennedy (@SenJohnKennedy) February 15, 2023
This is where we are at.
The reckless policies of our leaders created this inflation crisis, and we are all suffering as a result.
Now central banks all over the globe are raising interest rates in a desperate attempt to get inflation under control, and that threatens to burst the greatest debt bubble in the entire history of the human race…
Debt is vital to the functioning of the world economy. But, after soaring in the aftermath of the 2008 global financial crisis and the COVID-19 pandemic of recent years, it has reached unprecedented levels: as of last June, total debt amounted to $300 trillion, or 349% of world GDP. With negative supply shocks persisting, and the world’s major central banks scrambling to rein in inflation, debt risks are becoming increasingly alarming.
As New York University’s Nouriel Roubini explains, “The explosion of unsustainable debt ratios [in recent decades] implied that many borrowers – households, corporations, banks, shadow banks, governments, and even entire countries – were insolvent ‘zombies’ that were being propped up by low interest rates (which kept their debt-servicing costs manageable).” Inflation’s return ended this “financial Dawn of the Dead,” and together with low growth, is propelling us toward “the mother of all stagflationary debt crises.”
Higher interest rates are going to seriously slow down economic activity, and there are all sorts of signs that this is already beginning to happen.
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On Thursday, we learned that U.S. home construction has fallen to the lowest level that we have seen since the early days of the COVID pandemic…
New U.S. home construction slumped again in January to the lowest level since 2020 as elevated mortgage rates combined with pervasive inflation continued to cool demand.
Housing starts slid 4.5% last month to an annual rate of 1.31 million units, according to new Commerce Department data released on Thursday. That is below Refinitiv economists’ forecast for a pace of 1.35 million units.
In the months ahead, the U.S. housing market will continue to crash.
And the tsunami of layoffs that we have been witnessing will get a whole lot worse.
Those that are running things are stuck between a rock and a hard place.
If they quit raising interest rates, inflation could potentially spiral out of control.
But if they keep raising interest rates, the economy will continue to implode.
Which option will they choose?
So many of the long-term economic trends that we have been warned about are now coming to fruition.
There has never been more debt in the world than there is right now, and the entire global system is starting to buckle.
We get to be here for the grand conclusion of this mess, and it isn’t going to be pleasant.
***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible. I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is definitely a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.
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