The Federal Reserve Continues to Pull the Wool Over Everyone’s Eyes
The Federal Reserve Continues to Pull the Wool Over Everyone’s Eyes
The New York Federal Reserve bank reports that US household debt has hit a new record. Americans are increasingly using credit card debt at high interest rates to pay for their living expenses. Delinquencies are rising. About 17% of Americans are using 90% or more of their credit card limit and an additional 11% are using 60-90% of their credit card limit. That means 28% of American households are heavily indebted at high interest rates that prevent their ability to pay down the debt. Many struggle to make minimum payments, which means their debt increases monthly from interest alone without new borrowing.
The 20% plus credit card interest rates go far beyond usury. It makes one wonder how a consumer economy can survive when so much of personal income is drained off in debt service. How can consumers be causing inflation when they have no discretionary income to spend? What is the point of the Fed restraining the economy to combat inflation when the economy is already tightly constrained by debt service?
Is the Fed really this mindless? Let’s examine this question further.
Last Tuesday Michael Barr, a Federal Reserve vice chairman told a House committee that delinquency rates are rising among commercial real estate loans backed by office buildings, auto loans, and consumer loans. He reported that commercial real estate delinquencies are at a 5-year high and that credit card and auto loan delinquencies are rising. The Federal Reserve is proposing increases in capital requirements for banks so that they can meet the stress of rising delinquencies.
Read from the PDF below:
Read the 2nd PDF: Elaborate further on the FED
