The Federal Reserve Bank of New York reported this week that the sum of all US citizens credit card debts had topped $1 trillion for the first time in history.
Record-high consumer debt belies the Biden administrations claims to have tamed inflation, two market experts say.
Americans are up to their necks in more debt than ever. Aquiles Larrea, CEO of Larrea Wealth Management, and Todd Bubba Horwitz, chief market strategist at BubbaTrading.com, linked that to the real inflation rate felt by consumers.
Aquiles Larrea told Sputnik that Americans were spending more money at a time where interest rates have gone up, thereby by default, the credit card interest rates go up as well.
The finance expert said the spike in credit card debt was a delayed result of the peak in inflation in mid-2022, following the Biden administration’s decision to impose sanctions on Russia over its de-Nazification operation in Ukraine.
He explained that ordinary people don’t feel the effects of a headline inflation rate until months later. Inflation isn’t something that comes and knocks on the door, Larrea said.
Most people didn’t start feeling the effects so roughly about four to eight months afterwards. It’s not an immediate thing that you feel and you say to yourself, oh, my gosh, what do I do?
It is something that you see, at the pump. You may see it initially in the grocery store, as you see it, probably three or four months afterwards.
Todd ‘Bubba’ Horwitz told Sputnik that he took issue with Vice-President Kamala Harris claim that inflation had been falling steadily for the past 12 months.
I’m saying she’s ignorant. I say she has no clue. I mean, let’s let’s be honest, American households are spending 20% more this year than they were last year, Horwitz said. Let’s not try to sugarcoat that.
The trillion dollars is not the number to talk about. The true number to talk about is the amount of people that are at their max credit card debt, Horwitz explained.
Obviously inflation creates higher debt numbers, but how many people are at their maximum of credit card debt and how many people are going to paying usury rates when they have to pay the interest on these things.
The wealth manager stressed that even declaring personal bankruptcy was no escape from the vicious circle of debt, since the credit card lobby got that dropped out of bankruptcy laws years ago.
But of course, if you listen to President Biden or Vice President Harris, everything is great. We couldn’t be better, Horwitz noted. Of course, if you look in the streets and where I’m in Las Vegas right now, you can see more homeless than you’ve ever seen before.
Sputnik / ABC Flash Point News 2023.