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(Schiff)—With consumer debt reaching record levels, the Federal Reserve contemplating rate cuts in 2024, and post-Covid inflation still yet to reach its peak, a storm is indeed brewing.
Price increases on essential goods like food, housing, and fuel are hitting hard for Average Americans. But in its policy to avoid economic reality as much as possible, the Fed’s CPI numbers don’t account for factors such as consumers buying cheap alternatives instead of the name brands that they used to easily afford.
Acting as de facto PR agencies for Federal Reserve monetary policy, some media outlets are claiming that Americans are making headway on their debts, it’s just that higher inflation is obscuring all their great progress. As described by WalletHub editor Christie Mathern:
“When you adjust for inflation to compare this number to past years, our current credit card debt total is actually 15% lower than the highest number in 2008.”
According to that analysis, crippling price increases are causing consumers to take on more loans, but the debt only seems too high because each dollar is worth so much less now than it was 15 years ago. Unfortunately, the economy is now so irreparably distorted that these perceptions of economic pseudo-reality have become the norm. Increasingly severe mental gymnastics are required to continue justifying the position that consumer debt has reached anything but utterly unsustainable levels.
Meanwhile, trillions printed during Covid are still in the economy, meaning inflation will only get worse as Powell waves his magic wand to cut rates in the hopes of “stimulating growth.” If you believe that more debt automatically equals more growth, then Powell might be right. But the real result will be higher prices at the store, more consumer debt, and more previous debts left unpaid. According to a Bankrate survey, over 50 million Americans are carrying credit card balances for an entire year and then some, and other numbers show that around half of consumers are carrying balances from month-to-month.
“Total credit card balances hit a high of $1.08 trillion in the third quarter of 2023, according to the Federal Reserve Bank of New York — a figure that is up $48 billion over the quarter and $154 billion over the year. Interest on this debt is also increasing, with the Federal Reserve reporting the average APR for revolving credit at 22.77 percent as of the third quarter.”
One has to wonder if maybe consumer defaults are the goal. Perhaps “economic growth,” in the Fed’s eyes, really means crashing it all so that more assets like real estate can be owned by parasitic megabanks. However, the simpler explanation is that backed into a corner with so few weapons in their arsenal to meaningfully stabilize prices or get debt under control, there isn’t much else that the Fed can do other than more of the same.
Delinquencies are already at their highest point in about a decade, and the notion that these debt-addicted spenders are going to borrow less rather than more appears quite unlikely in 2024. Lower interest rates will be too tempting when cash-strapped consumers are already struggling more than ever just to afford rice and beans:
As Peter Schiff tweeted on January 11th, there’s unfortunately no end in sight for consumers who are already borrowing just to finance basic needs.
Anyone who thinks the #Fed will succeed in returning #inflation to 2% doesn't understand inflation, including #Powell or other FOMC members. Today's hotter than expected Dec. #CPI doesn't mean that the Fed has to fight harder to win the inflation war, but that it's already lost!
— Peter Schiff (@PeterSchiff) January 11, 2024
As he said on last week’s The First TV with Jesse Kelly:
“Americans continue to borrow to buy things that they don’t earn enough money to afford, and all that means (is) more upward pressure on prices — the Fed has done too little, too late…we’re running a trillion dollars in debt every quarter.”
But if the job numbers pick up, maybe consumers can afford more expensive survival needs and finally start paying down those debts…right? Not so fast. 2023 was a big year for layoffs, especially in an overly-frothy tech industry suffering further disruption by AI. And ResumeBuilder.com’s recent survey found that almost half of companies are anticipating more job cuts in 2024.
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Making matters worse, over 1 out of 4 debtors (especially Millennials and Gen Z) are already saying YOLO and “Doom Spending” their way into an even deeper hole. That’s more than 25% of American consumers throwing in the towel, borrowing like there’s no tomorrow, and all but guaranteeing default at one point or another.
The only question left is when we’ll reach the debt event horizon that sucks the economy into a black hole of runaway inflation and cascading defaults. If the Fed is good at one thing, it’s kicking the can down the road — but at some point, that road leads to a cliff, and from there, there’s nowhere left to go but into the void.
Ten Election Irregularities That Have Occurred During Early Voting So Far
by Just The News
A variety of election irregularities – at least ten of them – have occurred across the country in the weeks leading up to Election Day, as some states have reported record-breaking turnout during early voting. The issues range from burning ballot boxes to fake voter registrations, with the close presidential…
Will Gold and Silver Prices Drop if Donald Trump Wins?
by Sponsored Post
It’s well-established among economists that if Kamala Harris wins the presidential election, gold and silver will likely shoot up in value. But what if Donald Trump wins? With his chances of victory increasing, should gold and silver owners sell now because values will drop during his second term? “Considering everything…
Election Skullduggery From Around the Nation
by PJ Media
To the surprise of no one with an ounce of grey matter, the 2024 election irregularities have begun, and, as expected, Democrats are responsible for almost of the malfeasance. Roughly 57 million Americans have already voted as of this writing, and I’ve found a K2-sized pile of evidence showing the…
P. Diddy ‘Kept Meticulous Records’ of His Parties and ‘Has Enough Dirt to Hang Expose of Hollywood’
by End Times Headlines
Sean “P. Diddy” Combs has had zero support from exes, including Jennifer Lopez and Cameron Diaz, who are in a major panic that he’ll drag them down by spilling sordid secrets about them if he winds up wearing a number, a source exclusively tells In Touch. “It’s not like they’ve…
What if Harris Gets Away With It?
by The Blaze
On Nov. 5, the American experiment in republican government may well come to an end. Over the past two decades, we have been living through a slow-motion communist revolution. Acts of political warfare have become commonplace. The most devastating has been the corruption of our election system. Having vilified Donald…
Here Are 8 Major Election Developments That Everyone Needs to Know About
by Michael Snyder
(The Economic Collapse Blog)—Can you believe that we are less than a week away from Election Day? Over 57 million Americans have already voted, and in some states more than half of the total expected vote is already in. So it may already be too late for a last minute…
Democrats Plan for Color Revolution
by Zero Hedge
It feels like there’s been a notable shift amongst Democrats in the last month. A recent sense of fatalism – or perhaps just simple resignation to what appears to be an inevitable Trump win. But as it turns out, there are some Democrats who have been preparing for this potential…
This Election Will Not Prevent the Coming Chaos
by Mike Pottage
(WND)—It seems the justice system is overwhelmed by criminal cases involving illegals, and this puts Americans at risk of being short changed by that system. What is even more astounding is the fact this crisis was created by the Democrat Party and was 50 years in the making, and yet…
House Republicans Warn White House It Could Have Violated Federal Law by Editing Biden’s Transcript
by Just The News
House Republican Conference Chair Elise Stefanik and House Oversight Committee Chairman James Comer accused the White House on Wednesday of publishing a “false transcript” of President Joe Biden’s controversial remarks on Tuesday, and warned doing so could have violated federal law. The president appeared to say that supporters of former…
As Christians Go To The Polls, We Must Remember: The Future Of Our Nation Is At Stake
by Harbingers Daily
In just a few days, our nation will hold one of the most consequential elections in decades. Voters will go to the polls on Tuesday, Nov. 5, to cast their ballots for the next president of the United States, as well as for many crucial congressional, state and local offices….
‘Fertility Call Checks’ — Chinese Communists Cold-Call Women Demanding Details About Their Periods
by Breitbart
Chinese women are flooding regime-controlled social media with complaints that local Communist Party officials are making phone calls to harass them into having more children, the South China Morning Post reported on Tuesday. The callers, government “grassroots” officials, sometimes demand details of their private lives including the timing of their…
Absolutely Massive Food Bank Demand in the Swing States of Pennsylvania, Michigan and Wisconsin
by Michael Snyder
(The Economic Collapse Blog)—The economy is the number one political issue in America right now, and it isn’t because the economy is doing well. The long-term economic collapse that I have been writing about for years is playing out right in front of our eyes, and it is going to have…