from Jay Taylor Media:
by Wolf Richter, Wolf Street:
Let the good times roll.
Total consumer credit – or less soothingly, consumer debt – rose 4.8% in the second quarter from a year earlier, or by $176 billion, to $3.87 trillion (not seasonally adjusted), the highest ever, according to the Federal Reserve. This includes credit-card debt, auto loans, and student loans, but not mortgage-related debt. Given how passionate Americans normally are in spending money they don’t have – that 4.8% increase is moderate: In 2011, increases exceeded 11%.
The chart below shows the progression of consumer debt since 2006. After the seasonal hangover in Q1, following the spend-and-borrow party in Q4, consumer debt set a new record in Q2:
by Chris Marcus, Miles Franklin:
Last Wednesday the Federal Reserve held a meeting and indicated that they plan to go forward with more rate hikes. Yet they left a key question unanswered.
Specifically, if the Fed is going to continue to raise rates while also unwinding its quantitative easing balance sheet, who is going to buy all of the bonds?
While the Fed didn’t raise rates at this past meeting, there were changes in the language of the statement that indicate the central bank is even more committed to hiking than before.
by Michael Snyder, The Economic Collapse Blog:
America, you officially have a debt problem, and I am not just talking about the national debt. Consumer bankruptcies are surging, corporate debt has doubled since the last financial crisis, state and local government debt loads have never been higher, and the federal government has been adding more than a trillion dollars a year to the federal debt ever since Barack Obama entered the White House. We have been on the greatest debt binge in human history, and it has enabled us to enjoy our ridiculously high standard of living for far longer than we deserved. Many of us have been sounding the alarm about our debt problem for a very long time, but now even the mainstream news is freaking out about it. I have a feeling that they just want something else to hammer President Trump over the head with, but they are actually speaking the truth when they say that we are facing an unprecedented debt crisis.
from Silver Doctors:
Yesterday TraderStef reached out to us on Silver Doctors twitter (we’ve yet to be shadow banned).
She shared with us one of her latest post regarding the myth of QT vs growing US dollar cash in circulation.
Interesting points made below. The Fed has often targeted 2% inflation rates. even some suggesting making 4% inflation a potential target mark. They’ll use all sorts of con games to get there.
by Jim Rickards, Daily Reckoning:
As gold has struggled through 2018, (down over 10% from $1,363/oz. on January 25 to $1,215/oz. today), my forecast for a strong year-end for gold has remained unchanged.
This forecast is based on a better-late-than-never realization by the Fed that they are overtightening into fundamental economic weakness, followed quickly by a full-reversal flip to easing in the form of pauses on rate hikes in September and December.
Those pauses will be an admission the Fed sees no way out of its multiple rounds of QE and extended zero interest rate policy from 2008 to 2013 without causing a new recession. Once that occurs, inflation is just a matter of time. Gold will respond accordingly.
by Charles Hugh Smith, Of Two Minds:
Consider how a “balanced portfolio” yielding “balanced returns” worked out for middle class retirees in Venezuela.
The fantasy that a “balanced portfolio” yielding “balanced returns” will fund a stable retirement for decades to come is widely accepted as a sure thing:inflation will stay near-zero essentially forever, assets such as stocks and bonds will continue yielding hefty income and capital gains, and all the individual or fund needs to do is maintain a “balanced portfolio” of various asset classes that yield “balanced returns,” i.e. some safe “value” lower-yield returns and some higher risk “growth” returns.
This fantasy is based on the belief that yields will exceed real inflation for decades to come. That is, if inflation is 2%, and the average yield of a “balanced portfolio” is 6%, then the inflation-adjusted return is 4% annually–not great, but enough to secure retirement income.
by Harley Schlanger, LaRouche PAC:
The world is currently seeing a new paradigm of cooperative relations and economic development take hold, from its initiation in China’s Belt and Road Initiative, across Eurasia, Southwest Asia, and Africa. It is also watching the major power centers of Europe, on London’s lead, insist on rejecting this new paradigm in favor of geopolitical “zero-sum, win-lose” economic policies and war confrontations with Russia and China.
In the center is the Presidency of Donald Trump: disrupting the confrontation with Russia to the murderous fury of the geopoliticians and their media; fully intending to build a new U.S. economic infrastructure and restore the American industrial worker; but in a hardening trade confrontation with China which threatens his peace diplomacy in Korea and his early good relationship with President Xi Jinping; and with his infrastructure plans having gone nowhere thus far.