US Consumer

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Or American consumers. I did not realized that the consumer credit card debt skyrocketed recently until I saw a year at Twitter. This chart has about 4 years of data: both the credit card loan and personal savings. The source of data is from FRED (I think it stands for Fed Research Economic Data): I noticed this link is actually from St. Louis fed, not too far from where I live. This chart has about 20 years worth of data. Besides the long term overall trends: consumer debt goes up in last 20 years in general, savings rate were mostly flat except the two stimulus rounds during 2020 / 2021 pandemic. But from Mar 17, 2021, it seems the two curves went totally opposite directions, the debt went up, the savings went down.

This is not sustainable, if we use some common sense. Because the consumers will accumulate debt, a similar analogy is the US as a country owe money to foreign government in the form of treasury (or debt in the US dollar). This is bad too, because as we may know, the interest on those debt will go up and soon or later the US will hit the debt ceiling (a bit like consumer’ credit card limit).

The US has a lot of smart people, a decent political system, and market based economy. But the “shop until drop” mindset, and / or the over reliance on consumer spending is the achilles heel of the US economy.

Last but not least, “Why Americans Are Drowning In Debt” by CNBC (via YouTube).