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Tag Archives: Debt

Consumer Debt Charts Biggest Gain in 20 Years

The Federal Reserve is talking about raising interest rates. Well, that’s going to be a big problem for American consumers who are running up debt at a torrid pace. This is yet another reason why the Fed can’t do what it’s claiming it will do.Consumer debt jumped 11% year-on-year in November, according to the latest data released by the Federal Reserve. It was the biggest single-month jump in consumer debt in 20 years.Total consumer debt jumped by $39.9 billion in November. That doubled...

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Treasury Adds $709B to the Debt in a Single Month

The debt ceiling was raised in December and the Treasury responded immediately, adding $709 billion in debt over the month.To be fair, $470 billion of this was non-marketable, as shown below.Of the $470B in Non-Marketable, $261B was used to replenish the Federal Retirement Fund which is raided each time the Treasury uses extraordinary measures. Another $118B went to the Highway Trust Fund with the Disability Fund getting $76.5B. Most of this debt is interest-free, but it’s used in...

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Abandoning the Gold Standard Undermined Labor Productivity

Labor market productivity has been dropping for decades. And you can trace the plunge back to the demise of the gold standard.US labor market productivity plummeted in the third quarter of 2021. Revisions to the data showed a 5.2% drop in productivity, even worse than the dismal initial reading last month. It was the worst productivity decline since 1960.Workers earned more and hours worked increased, but output plunged.Labor productivity is calculated by dividing an index of real output...

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Retail Sales Disappoint Despite Surging Prices

In October, retail sales surged much higher than expected, rising 1.7%. The mainstream gushed over retail spending, asserting that it was a sign that the economy is booming. At the time, I argued that it wasn’t necessarily good news.Well, the news just got even worse. Retail sales in November disappointed, despite another big surge in inflation.Retail sales in November only rose 0.3%. The consensus expectation was for a 0.8% gain with some economists projecting sales to jump by as much as...

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I See Red! Consumer Debt Jumped Again in October

American consumers piled on more debt in October as inflation continues to squeeze their pocketbooks.Consumer debt grew by $16.9 billion, an annual increase of 4.6% (seasonally adjusted), according to the latest data released by the Federal Reserve. That raised total consumer debt to over $4.38 trillion.The Federal Reserve consumer debt figures include credit card debt, student loans and auto loans, but do not factor in mortgage debt. When you include mortgages, Americans are buried more...

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I’m Dreaming of a Red Christmas?

It appears American consumers are going to have a red Christmas this year.Red — as in going deeper into debt.Shoppers plan to spend less, but borrow more this holiday season.Black Friday spending fell this year, both in stores and online. It was the first year-over-year Black Friday decline on record.Online retailers rang up $8.9 billion in sales, down slightly from the $9 billion spent online in 2020. It marked the first time ever year-on-year online sales dropped.Foot traffic in...

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Booming Retail Sales Don’t Necessarily Signal “Strong Economy”

Retail sales surged at a higher than expected rate in October, rising 1.7%.The mainstream reported this as fantastic news signaling a strong economy. American consumers are out there buying lots of stuff. The stock market rallied and gold fell.But the mainstream narrative isn’t giving you the full picture. There are two important factors to consider as you analyze these surging retail sales numbers.First, retail sales aren’t inflation-adjusted. The data just reflects the amount of money...

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Treasury Binges in October, Adding Almost Half a Trillion in Debt

After all the drama, Congress finally did what everyone knew it would do.  It raised the debt ceiling by $480 billion in October. The Treasury wasted no time and quickly added $480 billion to the national debt in the second half of the month.With this new debt tagged on, if the Fed has to raise rates to 6% to fight inflation, it would increase interest costs by $250 billion within 6 months and nearly $1 trillion within a few years. This is why the Fed must tell everyone that inflation is...

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As Prices Rise, Americans Turning to Credit Cards

American consumers piled on more debt in September as higher prices squeezed wallets.Consumer credit grew by $29.9 billion in September, bringing the total to $4.37 trillion, according to the latest data from the Federal Reserve. The increase in consumer debt nearly doubled the consensus estimate of a $15.5 billion increase.Year on year, consumer debt was up 8.3% in September.The Federal Reserve consumer debt figures include credit card debt, student loans and auto loans, but do not...

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September Trade Deficit Smashes June Record by 10.5%

The September trade deficit smashed the record set just last June.September 2021 charted a total trade deficit of -$80.9 billion. That was up a massive 11.2% over the August trade deficit of -$72.8 billion and crushed the previous June record of -$73.2 billion by over 10.5%.The new record was driven by Goods. The Goods deficit increased 10% MoM from $89.2B to $98.2B. The Services Surplus actually increased for the first time since May, up 4.8% from $16.4B to $17.2B.The new Goods record...

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