As the mainstream media, corporate leaders and politicians ramp up the recovery talk evidencing last quarter’s holiday spending as proof that things are getting better, consider that all may not be as it seems (usually it’s not).
We may have seen Americans going ballistic for Xboxes, flat screen TV’s, iPhones and other consumer must-haves, but that doesn’t mean they had the money to actually buy them.
Here is yet further evidence that American consumers are hitting a financial brick wall, having lost their income streams and spent their savings just to maintain the lifestyle of a dying paradigm.
Consumers increased their debt in November by a seasonally adjusted $20.4 billion, the largest increase since November 2001, the Federal Reserve reports.
Monthly debt rose at a 10% annual rate in November, a much faster pace than had been expected by (surprise) Krugman-like Keynesian economists. They simply don’t get that when the Fed prints money, it gets into the system.
All types of credit gained in the month. The non-revolving category of debt, such as auto loans, personal loans, and student loans, rose $14.8 billion, or 10.7%, in November. Credit card debt jumped by $5.6 billion, or 8.5%, in the month.
No matter how bad housing, unemployment or our economic prospects become, we the people will not be deterred from spending even the money we don’t have on products that will only further exacerbate our problems when the system does finally buckle.
It seems that most of us learned nothing after the collapse of 2008.
The next time around will not be so forgiving.