Household debt first increase in 4 years largely driven by massive increases in student debt. Auto loans showed increase volume in sub-prime loans.
In a recent post we discussed how personal income growth is having tough go at the current economy. However, with incomes largely stuck in the quicksand of a mediocre economy for the working class, we see that the elixir of spending is back at the table again. Debt spending is making up for the lack […]
Comparing the inflated cost of living today from 1950 to 2014: How declining purchasing power has hurt the middle class since 1950.
Inflation has a subtle eroding effect that impacts entire economies. In the United States, we have been fortunate to have relatively stable rates of inflation for two generations. Even in times of high inflation like the 1970s, people were able to adjust unlike places that experience uncontrolled inflation like Argentina is currently facing. Also, wages […]
When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.
There are significant consequences with the Fed continuing on course with Quantitative Easing. On paper, it may seem that all is fine on the home front. However, many regular Americans are finding it harder to purchase a home in spite of a low interest rate environment. The Fed has created perverse incentives where big banks […]
The global debt reckoning – Total global debt at $230 trillion. Total world debt over 300 percent annual GDP. There is no escape from a reckoning with debt markets.
Total global debt crossed a troubling event horizon by going past the $200 trillion mark last year. Given the latest figures we are likely well above a total global debt of $230 trillion based on a comprehensive study done by ING last year. The banking sector rummages for every possible way of accessing debt. Global […]
The shackles of consumer credit in a low rate environment – Banks would rather leverage low rates from the Fed than lend money to cash strapped American households. 15 percent average rate on credit cards and typical savings account rate near 0 percent.
In a world where debt equals the ability to purchase large items, access to debt is king. For this reason banks are the new modern day oligarchy since they have a nearly unlimited line of credit with the Federal Reserve. The public during the credit bubble days had access to nearly unlimited debt via mortgages, […]
Say hello to my little friend, inflation: Shrinking packages, higher tuition, rising healthcare costs, real estate values jumping all the while household incomes remain stagnant.
Only those deep in denial think that inflation is not occurring in the economy. You only need to look back 10 years to see how nutty things have become. Is the price of a car more or less than it was 10 years ago? How about the price of tuition? Real estate? Healthcare? Inflation is […]
The froth before another stock market crisis: Stock market is overvalued by 27 percent based on historical price to earnings ratio.
The stock market has once again become an overvalued casino where only the large financial players can use massive leverage to enjoy short-term rewards. Even looking at historical price-to-earnings (PE) ratios we find that stocks are dramatically overpriced. Yet the stock market is a sham for most Americans. In fact 53 percent of Americans don’t […]