It's important to note that the "keep digging" debt solution may have hit a brick wall in America. Consumer and credit card loan growth have been contracting sharply since April 2011. This sharp about face suggests either improving economic conditions or capitulation in terms of using revolving debt keeping up with expenses. The message of the market will likely confirm the latter.
Consumer and Credit Card Loans Loans Year-over-Year Change For All Commercial Banks
Consumers in U.S. Relying on Credit as Inflation Erodes Incomes
Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.
The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month. The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor.
Source: bloomberg.com
