Submitted by Tyler Durden on 03/07/2012 - 15:22 Consumer Credit Gross Domestic Product headlines
One look at the just released consumer credit data would make one believe that the US consumer is getting back into it and the velocity of money is finally starting to ramp up: after all the headline January number came at a whopping +$17.8 billion on expectations of +10.5 billion. Nothing could be further from the truth. As the first chart below demonstrates, January revolving credit, as in that used on one's credit card, actually declined by $2.9 billion compared to December, and was back to $800.9 billion: the first decline in 4 months as consumers spend less following an already weak holiday season. Yet offsetting this was an absolutely massive surge in Non-revolving credit, i.e., mostly student debt, which soared by $20.7 billion in the month, the highest sequential jump in this category in history, leading to a very misleading print of a major increase in credit. For earlier observations on the soaring student loan bubble see here. And it gets worse: when spread by sources of credit, the only place where credit came from was the US government, which funded a near record $28 billion, all of it going into student loans, even as every other source of credit declined in the month! If this is not the most blatant gaming of headlines, we don't know what is. But yes, America's lucky students get ever deeper into debt slavery, only to realize upon graduation that there are no jobs that pay high enough to allow them to pay off this debt. Thank you uncle Sam - may we have another bubble.
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http://www.zerohedge.com/news/january-consumer-credit-surges-government-blows-sudent-debt-bubble-epic-proportions
Comments: 105
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Gully Foyle
Gully Foyle's picture
Hey now!
The idiot BIL just advised my son to take out student loans because the rates are cheap right now.
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Wed, 03/07/2012 - 15:29 | 2233371 trav7777
trav7777's picture
i wouldn't take on any debt at this point that cannot be discharged.
The gov has moved to garnish SS, vet bennies, etc., over child support arrearages (which in some states are LUDICROUS - judges tell people laid off to just "go find" another job paying the 6 figures they used to earn before their job was outsourced). So don't have kids either unless you're prepared to kill their mom, I guess.
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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