We had to set this all-time record before the devastating global collapse.
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” — Ludwig von Mises
The Calm Before The Storm
August 7 (King World News) – Here is what Peter Boockvar noted as the world awaits the next round of monetary madness: Well, it finally happened. Revolving consumer credit (mostly credit cards) outstanding in June finally exceeded its April 2008 high. See chart below.
REVOLVING CREDIT OUTSTANDING HITS ALL-TIME RECORD!
The 4.6% annual percentage change in Q2 compares with a savings rate that is at 3.8%, not far from the lowest level since December 2007. A reminder, core retail sales slowed to a 2.4% y/o/y growth rate, matching the slowest since January 2014…
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The pace of nonrevolving consumer debt outstanding did slow to a 3.5% annual percentage change as the pace of gains in student loans and auto loans (for obvious reasons) moderated. But as seen in the chart, a picture says a thousand words with this area of consumer credit.
ALL-TIME RECORD NON-REVOLVING CREDIT OUTSTANDING!
King World News note: The end result of this massive consumer debt binge will be disastrous. Look at the extremely important quotes from Austrian Business Cycle Theory that prove this cycle will end in a devastating collapse. And remember, protect yourself and your family from what is coming.
The “crisis” (or “credit crunch”) arrives when the consumers come to reestablish their desired allocation of saving and consumption at prevailing interest rates. The “recession” or “depression” is actually the process by which the economy adjusts to the wastes and errors of the monetary boom, and reestablishes efficient service of sustainable consumer desires.
Delaying The Day Of Reckoning…
Continually expanding bank credit can keep the artificial credit-fueled boom alive (with the help of successively lower interest rates from the central bank). This postpones the “day of reckoning” and defers the collapse of unsustainably inflated asset prices.
Will End In A Severe Collapse
The monetary boom ends when bank credit expansion finally stops – when no further investments can be found which provide adequate returns for speculative borrowers at prevailing interest rates. The longer the “false” monetary boom goes on, the bigger and more speculative the borrowing, the more wasteful the errors committed and the longer and more severe will be the necessary bankruptcies, foreclosures, and depression readjustment.
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