Debunking Deleveraging

Sometimes I never leave
But sometimes I would
Sometimes I stay too long
Sometimes I would
--The Motels

Lots of ink has been spilled about the 'consumer deleveraging.' Consumers everywhere are supposedly paying down debt--cutting up credit cards, paying off mortgages, etc.

The data don't show it. Over the past year or so, consumer debt has leveled off which to many, I suppose, seems like deleveraging after a multi-decade run up.

Deleveraging and deflation are bedfellows. The data suggest that chance of deflationary winds remains substantial.

position in US Treasuries