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Credit Card Debt Barely Rises In October As Both Student And Auto Loans Surpass $1 Trillion
After September's record surge in total consumer credit, when non-revolving credit soared by $22 billion while credit card jumped by a whopping $6.7 billion, something appears to have snapped in October when according to the Fed, just $16 billion of new credit was created, almost half the prior month, and far below the consensus estimate of a $20 billion increase.
More concerning is that while the spigot for student and car loans was flowing, and $16 billion in new non-revolving credit was issued...
... revolving credit ground to a halt with just $178 million in new loans created.
The dramatic slowdown in new revolving credit, which was the lowest since February of 2015, may explain why holiday spending just suffered its first decline since the recession, as we reported previously.
That said, thanks to the generosity of the government...
... there is little risk that spending on the two staples that have kept the US credit machine chugging along, namely student and car loans, both of which have just surpassed a total of $1 trillion in notional debt outstanding.
Indicatively, there is $924 billion in credit card debt.
Finally, before anyone expresses concerns that debt-funded spending on cars ot colleges is about to hit a brick wall, fear not: presenting the full history of total nonrevolving credit in the US: about as exponential as they get.
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BULLISH ! ! ! !
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A great deal of the student loan debt can be auto loans. Let me explain the sad fact in the great state of Georgia. Student in low to middle income household that being 25,000 to 45,000 per year income. Has no job or income so no car loan at 75 to 100 percent, but gets a new car by the end of first year in school using student loans. The numbers below are PER SEMESTER.
Qualifies for Hope scholarship and is granted 90% of tuition payments average $3500, They are also granted PELL for $2500 to $5775. They then get Stafford subsidized loans for $4000 to $6000 as well as Stafford Unsubsidized loans for $4000-$6000. All depend on need, based on household income except hope, that is based on GPA, READ grade inflation for liberal arts majors. GA public University 12 hours and six year plan gets the student on average $15000 to $18000. Tuition room and board to stay on campus and meal plan, books and all fees cost $8500. THE REST REFUNDED TO STUDENT
Gets midrange $16500 dumped into their university bursars office account to pay the college. Then 3 weeks later gets a refund of $8000, some take only six or nine hours and get $10000 to $11000 to their back account or their Higher One college refund debt card. Most of which is the student loan portion. The interest on the subsidized loan is paid by the taxpayer.
BULLISH!!!
Well, you can live in a car for a lot less than a house.
The peeps might be saving up their credit lines for a last minute XMAS shopping bender ... but i doubt it.
If you buy on the internet ..you have to use a card..so this is strange....they say internet shopping is up bigtime.....
We pay our card off every month. Wonder how that fits in?
But they have to have the next iPhone so they'll put that on credit as well.
BULLISHIT!!! DO EBT CARDS COUNT?
After 2 personal bankruptcies, I was approuved for a $2500 credit card last year. I promptly jacked up my balance to $1500 in cash advances which took me 7 months to pay off. Once paid off, I cut up the card and cancelled my account. I am proof that an old dog can learn from his mistakes. My gift to myself this year is $0 debt. Fuck you very much Mr. Credit Card but this sheep will do without as will those on my X-Mas list...home baked gifts and hand made cards are on the menu this year.
RESIST DEBT IS WHAT I TELL EVERYONE
Correct. That's what banks are living from : debt - equivalent to slavery and misery. I have NO debt, and my savings are NOT in the banking system nor in the stock market. Not a penny.
Gold? Bitcoin? Just curious if there's other stores of savings (that are easily convertible into cash) that I'm not familiar with.
Learn to live as a minimalist. You'll sleep better and have less stress.
After while you'll realize you never needed all that stuff you used to buy.
You can find good deals on used items. Some like new.
The retailers jacked their prices back up after Black Friday, and sales are in the shitter. Another week and I expect to see most everything deeply discounted.
More people working = more people paying in cash?
Those who loan out money foolishly deserve to lose it and deadbeats should be labeled as such. Our new policy is to bailout both the fools and welchers. USA! USA! USA!
Most of the brainwashed sheeple American youth are just future Debt Slave Wussies awaiting their miserable lives of peonage to the Federal Reserve and their corrupt cronies!
This is today's most important article.
Our monetary system relies on debt EXPANSION.
In our system currency is created from debt. When not enough new debt is created then there is not enough currency in existence to pay the interest on the old debts.
It results in a tidal wave of defaults. Simple as that.
Someone has to increase total borrowing, or the system implodes.
No matter how small the "liftoff" I hope Ben's (Yellen's) helicopters are ready.
Because the solution is to have a real-economy-connected numeraire...but it will take time to implement which we sadly no longer have.
I find just being alive an expensive experience....bills, food, fun, etc.....
That is why I have no debt.
Don't blame me. I've been doing my share by buying gold, silver, food supplies and ammunition on credit. I can only do so much. Everyone else has to pitch in and help too. Jamie Dimons' bonus depends on all of us doing our part.