Into your life it will creep
--Buffalo Springfield
Wondering about the composition of consumer debt in the US? The below graph shows a breakdown. Mortgage debt is by far and away the largest.
Many observers like the fact that credit card debt has been ticking higher (squint and you may actually see it!)--which suggest more spending on the horizon.
The other side of the trade is that more consumer credit is the last thing we need given the degree of leverage in the system...
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1 comment:
Rather than facilitating the transfer of savings across the economy to wealth-generating activities, when banks issue unbacked credit they are in fact setting in motion a weakening of the process of wealth formation. It has to be realized that banks cannot relentlessly pursue unbacked lending without the existence of the central bank, which, by means of monetary pumping, makes sure that the expansion of unbacked credit doesn't cause banks to bankrupt each other.
~Frank Shostak
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