CREDIT CARD DEBT & AUTO LOAN DEBT IS DROWNING AMERICANS- IT WILL NOT END WELL

Hi everybody, welcome back to Ox Talks. Really appreciate you guys watching the show. Please like the shows, share these videos with people far and wide, all of your social media with family, friends, coworkers, colleagues. And please subscribe to my channel. If you're not subscribed, please do so. It doesn't cost you anything. And I really appreciate the fact that we are growing this community. So I have an important bit of economic data to share with you today. I came out of the Zero Hedge late yesterday afternoon discussing the updated situation with consumers' credit card debt in the United States. And as you can imagine, the data is very discouraging. It is not good. And what it shows is we have a continued decline in the consumers in this country recarrying far more debt than they can afford to repay. Credit card debt has now surged to an all-time high. We have a revolving debt and we have non-revolving debt which includes auto loans that are also surging to all-time highs. I wanna share the article with you and I'm gonna also show you several nice pretty charts today that really drive the point home. Appreciate you watching the video. Let's jump right into it. The article from Zero Hedge is titled, In Last Hurrah, Credit Card Debt Unexpectedly Soars Despite Record High APRs, Interest Rates, As Savings Rate Hits Record Low. Says, In a Stunning Reversal, July Consumer Credit Growth Unexpectedly Reversed the Dramatic June Slowdown and Soared More Than $25 Billion to a New Record High of $5.093 Trillion with a T. I think I did a video last month where I discussed the fact that the credit card debt had actually subsided a bit. And the story I did was, are consumers now just tapped out? Are there no more credit lines to tap? Are there no more credit cards to apply for? And this story seems to indicate that somehow, somewhere, American consumers are finding more credit lines to tap into. Maybe this is banks are continuing to over-issue credit cards. Because look, at the end of the day, they want everybody to be a debt slave, right? They want you to be indebted so you're beholden to the system. They want you constantly making those minimum payments on your credit cards. They're looking for the latest and greatest thing that you want to buy that you shouldn't be buying. I know that's cynical, but that really is the way the system is set up, okay? They want you to be indebted. So 5.093 trillion is the new credit card debt numbers. So looking at the components, the sudden spike in revolving credit was most notable as credit card debt growth suddenly reversed in recent slowdown and surged by more than $10.6 billion. That's the biggest monthly increase since February, and it says the second biggest of the year. So again, I'll show you the first chart, and this is total consumer credit, a monthly change. The red is revolving credit, a monthly change, and the blue is non-revolving credit. So you guys take a look at that chart, okay? And you can see the change, okay, and where we're at over to the right, it is pretty substantial. You have to go back a ways back to see this large of an increase once again. So total consumer credit, all right? Revolving credit card debt is people taking out credit cards, all right? Visa, MasterCard, Discover, things of that nature. Non-revolving credit is student loan debt, and it's auto loan debt. We'll get into that in a quick second, all right? So that's the first chart I want to show you. The article goes on. But what may even be more notable is that after two years of gradual declines in the monthly rate of increase, non-revolving credit suddenly surged by almost $15 billion, and that's the biggest increase since June of 2023, and the second biggest since late 2022, all right? So what does that mean? It means that auto loans are going up. A closer look at the surge reveals that in quarter two there was also a reversal in the two components that make up non-revolving credit as total student loan debt unexpectedly always dropped by 8.3 billion to 1.745 trillion, a reversal from the 24.2 billion increase in the previous quarter. At the same time, listen to this. Car loans accelerated after declining by 0.8 billion in quarter one and rose by $8.5 billion in the second quarter. So not only are consumers evidently taking out more credit lines or they're continuing to ramp up the lines they already have on Visa, MasterCard, Discover, American Express, but they're also going out and evidently splurging on vehicles, whether that's used vehicles, new vehicles. It's car loans and that's the component of non-revolving debt that they're talking about here. So that has surged $8.5 billion and that is substantial, okay? The sudden surge in credit card debt was a big surprise, it says, because according to the Fed, the average rate on interest bearing credit card accounts just hit, listen to this, record high of 22.76%. These people are paying an average of almost 23% on these credit cards, folks. It boggles the mind because they're not, for the most part, the people that are running up their credit cards shouldn't be using them in the first place and they're never gonna be able to meaningfully make a debt in that debt, okay? All they do is they do credit, they do balance transfers from one card to the other and in some instances, and we'll get to the charge office here in a second, they just don't pay it, they just stop paying it, okay? And we'll see that just like we did back in 07, 08, when the charge jobs were massive, bankruptcies were massive. So as yet with consumers even more strapped, the actual cash and equity as the personal savings rate in the United States has collapsed from a 5% to 2.9%, the lowest since the Lehman Brothers bankruptcy, okay? So let me show you the next chart, which is the personal savings rate, all right? And you can see again over to the right of your screen where the personal savings rate is now, okay? We're over here, that's where we're at, all right? So that is the money that people have set aside. We know that most people in this country do not have $400 saved up to cover an emergency. So there is showing you the personal savings rate in this country is plummeting. Says there's only so much more credit, credit card maxing out that can take place before reality finally sets in. And again, this is the issue is when does this thing come crashing down? Where is the brick wall, okay? As can be seen in the next and perhaps most striking chart, and this is important, total credit card debt at an all-time high while personal savings rate at an all-time low. So now we have a chart which overlays personal savings rate, which we just showed you is declining and credit card debt, which is increasing. This chart is insane to actually see this when it's superimposed like that, all right? So we have the red, which is credit card debt, and we have the green, which is personal savings rate. Look at the divergence between those two things, all right? So does this end happily? You guys comment below. What do you think? I would venture to say absolutely not. Eventually, and maybe that time is sooner than later, the credit lines will run out. They will get maxed, and there'll be no place else for folks to go. And lastly, I'll address the charge-offs. That is when credit card companies simply are owed money. The credit card holders have fallen behind, you know, 60, 90, 120. And that means at some point, you know, Discover and Capital One just decide, well, these are uncollectible accounts, so we're gonna charge the accounts off. Now, after they charge them off, they sometimes file a lawsuit to collect the money. They can sometimes in certain circumstances. But let me show you the credit card charge-offs are going up. And for Discover and Capital One, this is a chart that shows Discover is in blue and Capital One Finance is in red. Look at the charge-offs, okay? Once again, over here, all right? So the charge-offs are, looks like ramping up to, at least this chart goes back to 2017, are ramping up quickly, okay? So this does not bode well for the average person in this country that we know is in financial distress. And I'm not here just to put salt in that wound. Those of you that are in that camp, you know, you just have to take, you know, every day, take a step. Take a step forward and continue to try to pay off the debt. Most important thing is try not to get into new debt that you absolutely don't have to incur right now. Just don't do it, right? And think twice about buying that luxury item that maybe you really don't need, that you really are just buying to impress somebody else or a friend or someone that, you know, that doesn't necessarily have your best interest at heart. So I'm not preaching. I'm just saying these statistics are, should be a wake-up call for everybody. And look it, if you're one of those that is smart with money and is smart with debt, and debt can be used in smart ways, obviously, but just carrying massive credit card balances that aren't getting paid off monthly is not smart, folks. Okay? If you're one of those people that has been diligent and is smart with, you know, with running very low debt or having no debt, please try to share these kind of, you know, this kind of information with those that do, those that are struggling with credit card debt, those that are, you know, using credit cards, let's say irresponsibly, okay? Because it's not gonna get any better and eventually it's gonna come crashing down. So hopefully you guys can keep people in your life, loved ones, family, friends, colleagues, from making this kind of mistake, all right? And having a financial tragedy as an ending. I'll leave it there today, just about 12 minutes. Thanks again. Please subscribe to the channel. Keep leaving your comments and liking the videos. Talk to y'all soon. Bye.