BATTLE FOR WORLD / NBC NEWS | September 10, 2019: This week one analyst suggested that “real” debt could be nearly 2000 percent of GDP, which attracted much attention, but consumer spending habits studied by some analysts say the real debt risk is much closer to home and include the amount and pace that American consumers are racking up with credit card debt.
“As far as American’s finances are concerned, the current situation is not too encouraging,” said senior analyst Jill Gonzalez at personal finance platform WalletHub. And that “We started the year owing more than $1 trillion in credit card debt, and although we paid off a large chunk in the first quarter, that could be a sign that more debt will be taken on by consumers.”
“In terms of revolving debt, we see spikes like this every so often, but they don’t jump by double digits all that much,” said Matt Schulz, chief industry analyst at CompareCards.
And “Given some other signs that we’ve seen of Americans’ confidence in their finances at the moment, I think this is a sign that things are getting a little bit tougher for folks,” noted Schulz.
During recent months, uncertainty over the tariff trade policies has prompted a sharp pullback in corporate investment, leaving consumer spending as the last big driver of economic growth in the US.
A lot of factors are coming into play: Federal Reserve cutting rates, which isn’t a guarantee that borrowers will see any measurable relief. Borrowers depending on their credit score, influence the amount of their total debt. And lenders are going to take advantage with higher interest rates.
And with “…pretty high interest rate, and when people carry that debt from month to month, that cost is a burden, and it can sometimes be the tipping point for people who are living close to the edge financially,” said Bruce McClary, spokesman for the National Foundation for Credit Counseling.
BATTLE FOR WORLD / REAL VISION FINANCE | September 11, 2019: Jim Rickards explains why there’s a financial crisis coming, and said that there’s no doubt that the Fed is overtightening, because in addition to trying to get interest rates back to normal, they are also reducing the balance sheet – to normalize the balance sheet. But now the Fed has a dilemma which is, what are they going to do if the US economy goes into rescission.