Consumer Credit Trends Say We Are Still Mired in Depression
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Consumer credit trends have been an excellent indicator of economic distress dating back to The Great Depression. Borrowing has been in steady decline for two years and rapidly eroding since January 2009. There is no hint of the widely marketed "economic recovery" in the consumer credit data.
The consumer-based economy faces stiff headwinds as revolving credit is contracting at approximately 10% per year.
Consumer credit trends are at their worst since The Great Depression. But our "modern" economy is far more dependent/addicted to debt-financed consumption.
Impending financial reform, high unemployment, looming foreclosures, rising bankruptcies, lapsing stimulus and increasing loan defaults bode poorly for the future of consumer credit availability and debt-financed, retail consumption.
Consumer credit trends have been an excellent indicator of economic distress dating back to The Great Depression. Borrowing has been in steady decline for two years and rapidly eroding since January 2009. There is no hint of the widely marketed "economic recovery" in the consumer credit data.
The consumer-based economy faces stiff headwinds as revolving credit is contracting at approximately 10% per year.
Consumer credit trends are at their worst since The Great Depression. But our "modern" economy is far more dependent/addicted to debt-financed consumption.
Impending financial reform, high unemployment, looming foreclosures, rising bankruptcies, lapsing stimulus and increasing loan defaults bode poorly for the future of consumer credit availability and debt-financed, retail consumption.
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