Borrowing, Overall Debt Both Up by 8.6 Percent in January (Happy Times)

http://ap.tbo.com/ap/breaking/MGAPK6SQGRD.html

Borrowing, Overall Debt Both Up by 8.6 Percent in January
The Associated Press Published: Mar 5, 2004

WASHINGTON (AP) - Americans increased their borrowing in January by the largest amount in eight months, the Federal Reserve reported Friday.

New debt rung up by consumers increased at a seasonally adjusted annual rate of 8.6 percent in January, or by $14.3 billion, from the previous month. That marked the largest increase since May and pushed total consumer credit outstanding to a record $2 trillion in January.

January's borrowing pace marked a pickup from December, when consumer borrowing rose at a 5 percent rate.

Demand for revolving credit, such as credit cards, rose at a 8.6 percent pace in January. That was up from a 1.4 percent growth rate in December and represented the fastest pace November 2001. <snip>

n/t

If the Gov. debt is up, Personal debt is up and businesses are said to be expanding (borrowing to expand) why is there no upward pressure on rates?

maybe the GDP up numbers from Bush do not reflect expansion in the US?

Watch for a "burst"--not just a "boost"--in the Prime Rate; and we all know what THAT means!:eyes:

(I.E. a boost in both personal and small business bankruptcies; in foreclosures; in credit card rates; falling home sales, etc.)

It's really getting harder and harder to see how ANYTHING--dirty-tricks-wise--that "Chip" Rove pulls out of his little black bag is going to help Dub this year; the "hard" evidence is getting too great--and too OBVIOUS!:mad:

B-)

And the fact that they are 20 percent now, in a time that the prime is as low as it has ever been, also shows how much money is being made bu so few at the expense of so many.

Any increase in the rates will cause wholesale bankruptcies. The higher the rate, the more the bankruptcies. And there goes the economy.

On the other hand, he must be under huge pressure to raise the rates. More T bond sales would come with higher rates, helping to finance the deficits. And the people who are dependiant on interest for their livings must be clamoring for more also.

So poor old Alan is caught between a rock and a hard place. Raise the rates and the economy goes down the crapper. Don't raise the rates and you can't attract foreign money. Oh well.

Nothing but credit. No foundation.


:evilfrown:

That's a bit odd.

... are selling leftover merchandise at clearance prices — 50%-75% off or more.

-measured as a percentage of GDP. Employee compensation as percentage of GDP lowest in 20 years.

Fallacy in tax cut stimulation arguments- most government tax revenue comes from worker income. In the so called recovery, while GDP allegedy grows, wages do not increase at a proportional rate, but decline on a relative basis, therefore tax revenues do not increase as forecast. This is an additional factor to declining revenues as well as the reckless and irresponsible tax cuts to the wealthiest Americans and corporations (who have been shirking their obligation to pay their fair share of taxes for some time).

As Senator Conrad has pointed out on more than one occassion, the amount of the prospective tax cut for the rich equals, almost exactly, the amount of funds the repukes plan to convert from social security revenues to general revenues. In this manner, the regressively taxed workers on the bottom get to pay for the tax cuts for the very rich. Then citizens have to listen as to how their social security fund benefits "have to be cut."

Today's pathetic new employment figures show the reality of the "strength" of this economy. When I go about looking for businesses to purchase (now, no one in my family has a job), most are marginal, many have gross incomes down 40 or more percent and do not make a profit, and numerous proprietors are looking at the same syndrome. Most of these businesses refuse to disclose their actual revenues because their situations are so pathetic. The (ad valorem) taxes on these small businesses by state and local governments are going up as state revenues decline. Those who are older and near retirement are looking to get off the last musical chair before the roof caves in. Huge number of bankruptcies coming up.

Most small businesses that are actually viable start at approximately $700,000.00 and have intimidating liabilities. The ecomnomic future is very fightening right now. People forced to work at lower capitalized businesses try to compensate by working 24/7. This is living like or as an immigrant.

bubble going to burst?

... our SEV home assessment just jumped up $16,600! (State Equalized Value = 50% Market Value.) Previous years increases were in the $3,000-$5,000 range.

Our "assessed value" is now over $40,000 more than we could probably sell it for. (Last year it was only about $6,500 over!) Now the City Assessors Office ways it's worth almost twice what we paid for it less than six years ago! (I wish!)

Plus: Our district just passed three school millages that will increase our taxes another $500/year!

But hey, we could max out our newfound equity and let the banks have it back in a few years.

...but all of this "growth" sounds like the dot-com boom. It seems to be built on speculation and over-confidence. I'm really concerned that America doesn't make much of anything anymore.

Oh yeah, I forgot, our new economy is based on creative ideas. Is there a technical school for that?

...purpose: to prop up real estate market. Every federal agency spends most of its time sending memos and directives back and forth making sure this buble doesn't burst.

I doubt they can keep it going forever, and I bet the plan is to let it pop when a democrat's in office so they can get their herbert hoover, to be followed by 50 years of Republicans running America.

Is personal debt growing faster than the GDP? How could that be?
I assume borrowed money is generally spent right away, which should fuel the GDP. Unless... is much of that money going overseas?

... people are using MasterCard to pay off VISA.

at a 1:1 ration and they're not making investments in the future. A good percentage of each dollar borrowed probably goes towards paying off old debt which bought something which decreased in value, whether it was a car, or a college education, or some useless consumer good.