all 34 comments

[–]magnora7[S] 10 insightful - 3 fun10 insightful - 2 fun11 insightful - 3 fun -  (18 children)

People are borrowing against the most expensive form of debt they have, not a good sign. People are running out of money and getting desperate, it seems. Looks very similar to the lead up to the 2008-09 financial crisis

[–]bucetao6969 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

Well, we're already in a recession.

[–]magnora7[S] 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (0 children)

Agreed, small businesses are hurting badly. In 1860 something like 95% of Americans worked at small businesses, now it's like 5%. And after covid it's probably even lower.

[–]Zapped 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

People are used to having money to spend with the Covid cash. The money is still floating around, but it is drying up in the hands of the average American.

[–][deleted]  (1 child)


    [–]Zapped 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

    You didn't apply. Most was given to companies to keep people employed through payroll bailouts. A lot was given to boost unemployment checks. This is one of the reasons guns and ammo sales went crazy, along with the BLM riots. Also, people paid off their credit cards with the extra money. Even though that income stream has dried up, people are still spending (or were until very recently).

    [–]Alphix 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (4 children)

    Except this time the commercial real estate sector is also in dire straits, due to companies downsizing their total area occupied.

    [–]magnora7[S] 4 insightful - 2 fun4 insightful - 1 fun5 insightful - 2 fun -  (0 children)

    Yes I saw something about a $1.5 trillion debt wave coming due on commercial real estate.

    I heard McDonalds just sold their headquarters buildings and lowered their minimum wage. There's a lot of businesses having to downsize now with money being so hard to get thanks to federal reserve rate raises (which they need to do to curb the inflation they created during covid and due to the ongoing petrodollar collapse)

    [–]Musky 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

    Which is used to back deposits at banks.... it is highly troubling, although also why I'm betting on banking stocks.

    [–]Alphix 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

    Wait, no, bet AGAINST them. Or bet against the USD by buying gold and silver!

    [–]Musky 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

    I have gold and silver investments as well. It's smart to diversify, hedge your bets.

    [–][deleted]  (7 children)


      [–][deleted]  (6 children)


        [–]Alphix 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

        I concur.

        [–][deleted]  (2 children)


          [–][deleted]  (1 child)


            [–]Tarrock 4 insightful - 2 fun4 insightful - 1 fun5 insightful - 2 fun -  (5 children)

            Worth noting that the last 2 peaks were at the start of the 2008 recession and after everyone lost their jobs due to covid. Now it's just inflation and recession.

            [–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

            Good points, but if you look closely the last peak was actually late 2019, right before covid... I think we were on the cusp of an economic breakdown and covid "saved" us (or at least kicked the can down the road for a couple more years)

            [–][deleted] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

            That's long been my take, as well. I thought the mRNA shots were an attempt to kickstart a new industry to infuse life into our dying economy.

            [–]Alphix 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

            And Powell jacking up rates because "the economy is too strong" (doing it on purpose actually).

            [–]EddieC 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

            "Inflation Is Coming! and what to do about it", by Ralph Borsodi
            Read pages 36 - 43 for Borsodi's five-fold plan to deal with it
            BUT note also pages 44 - 45 for "What people will actually do?" and finally Government confiscation...
            There is a simple way to prevent this future from happening:
            Let's Imagine & Discuss: "What If We Decorporatize?"

            [–]Virc 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

            Hey Tarrock could you please send a PM. I got some questions about a post you made as I'm investigating the Reddit mod in person

            [–]ActuallyNot 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (3 children)

            Similarly on the world scale China and Brazil have moved to the Yuan for trade payments, cutting out the dollar.

            With Russia, Saudi Arabia, South Africa, India, Iran and Brazil onside, America's ability to borrow or even sustain international debt will soon come under some very heavy international questioning.

            [–]MagicMike 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

            Anyone trusting China (lol!) to have a reserve currency is asking for a RED hot fireplace poker up the rear end.

            [–]ActuallyNot 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

            The economy is fairly large.

            [–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

            Great point. And not only that, but the world supply is being flooded with unwanted USD as various countries stop holding it for petrodollar reasons, aka they don't need it for trading oil, and they don't want it as a reserve currency nearly as much. So there's all this unwanted USD floating around, and the value per USD is going down as a result of the enlarged supply and lowered demand.

            So the Fed is having to raise rates to not only combat the covid stimulus inflation, they also have to counter this post-petrodollar swell of USD with rate raises as well. So it could get really nasty if they want to stabilize the currency, we could see lending rates go to 15-20%, which means money will be impossible to get. So any business or household operating on credit is now on a crash course to failure unless they can gain financial self-sufficiency because they can't get a loan or refinance their loan this time, not on their house or car.

            Hence the sharply growing credit card debt in the graph. It's going to be a very rough ride for those accustomed to the 0% Fed interest rates of the prior 12 years.

            [–]Alphix 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (5 children)

            Yep, and Powell still going "Economy is too strong, MUST. PUSH. RATES. HIGHER." when they count people with 3 jobs as 3 workers: wow the labor market is just too strong man, we need to break these people.

            [–]magnora7[S] 5 insightful - 2 fun5 insightful - 1 fun6 insightful - 2 fun -  (4 children)

            Yup, it's bad. They need to do it though to stop inflation. If they don't raise rates, inflation could get crazy and the price of food could double every month.... but they also created this inflation themselves through all the covid stimulus and so on. And the petrodollar dying is creating a lot of unwanted USD which is making each one worth less, aka inflation. So they're having to raise rates to compensate for the death of the petrodollar

            [–]Musky 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (2 children)

            the price of food could double every month.

            I just went shopping today and some of the prices were insane. $7 for a half gallon of ice cream. Almost $9 for a bag of oranges. $8 for a half gallon of milk, $8 for a half gallon of OJ -- although that includes a $2 bottle deposit fee for both. I don't know if you heard, but plastic containers contaminate milk and other foods:

            [–]Dragonerne 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

            Are those actually the prices? Lol, it is so cheap in Denmark then. I pay around $4 dollars a day in total for all my foods.

            [–]Musky 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

            Those were real prices, it seems fruits and dairy have jumped in price. This is one of the first times in, well, decades, I didn't get any fruit besides bananas -- thanks banana wars for keeping nanners cheap. Our total grocery bill for the month is $260 for two people, that also works out to $4.33 a day. I don't buy things that are overly expensive, it's the only way the price comes down again.

            [–]Alphix 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

            Economics does not recognize the loss of value of a currency on the international markets as inflation per se, but you are right, the effect is the same.

            [–]MagicMike 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (2 children)

            When the card is maxed out and the EBT cards no longer work, going to make summer 2020 look like a picnic.

            [–]magnora7[S] 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

            Good observation. To that effect, look at the delinqunicy rate from the article where I got the OP graph:

            It shows that the delinquency rates are very low right now, but the debt is very high. So everyone has taken out massive credit card debt, but it hasn't come due yet.

            So 60-120 days from now we could be seeing large amounts of delinquency, and then it might get bad like you say. They already cut EBT a few months ago pretty drastically, ending all the covid bonuses.

            [–]EddieC 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

            It's all part of the Boom & Bust Cycle through Corporate-controlled Money Supply to usurp the 99%
            But dwelling on the 1% - the source of the problem - will not get us out of our quandaries.
            No amount of complaining / protesting the 1% will bring about the change that we want

            The solution is simple - Direct Change - turn away from the 1%
            For money, we don't need corporate controlled money when we can have limitless Currenseas
            -- in a nutshell, what that means is
            1) everyone is a worker-producer - they can also become organized producers eg co-operatives
            2) all producers can create their own money
            But the writing is on the wall if we don't even have accretive dialogue for solutions, let alone implement them
            -- what these posts amount to: idle chatter

            [–]Drewski 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

            It's interesting how by 2018 the balances were almost as high as 2008/09. Didn't feel like a recession then, but I could be insulated having a decent job. Maybe something other than desperation was driving credit card use?

            [–]magnora7[S] 3 insightful - 2 fun3 insightful - 1 fun4 insightful - 2 fun -  (0 children)

            You were insulated by having a decent job. I was just starting out and got slaughtered career-wise and never recovered. And most of my peers in my graduating class have a similar story.

            [–]BanditMcFuklebuck 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (0 children)

            Classic cup and handle formation.

            [–]Brewdabier 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)