BEWARE! They Made a BIG MISTAKE Doing This to Americans

bad news guys now just in case you haven't noticed I'm pretty sure you have noticed but the government has basically been running our country with debt dread it run from it the bus comes all the same I mean we just can't just keep racking up debt without a plan here right guys just hear how one analyst puts it there's a problem right we're spending more money than we bring in and the debt's increasing and the cost of servicing that debt's going higher it doesn't take you know a rocket scientist or a Harvard MBA to say that's probably not sustainable now you often hear the word leverage when it comes to the economy and finance but really in the context of Economics it's mostly just meaning debt now during the boom phase you'll see debt all over the place everybody's taking loans out they're spending like there's no tomorrow it feels great like Prosperity is in the air but you know that's gonna have to end at some point so after all that spending frenzy with this deleveraging phase where people just start paying off their debts the spending slows down and the economy just takes a nosedive and guess what guys that may come sooner rather than later when it comes to the economy I mean just look at this the US consumer credit card debt exceeds one trillion dollars now these are the kind of records that we don't want to be setting now just to kind of point out we're approaching levels that we've seen during the Great Recession and during the onset of the pandemic and this is before the impact of federal student loan repayments which are set to resume in October Consumer Debt shot up by a whopping 17.9 billion dollars from May to June so we're definitely starting to feel the credit crunch caused by those federal rate hikes people are taking on more outstanding credit especially for stuff like mortgages and car loans trying to flex on your neighbor at the stoplight it's crazy guys the number is even beat expectations which by the way were only at 13 billion dollars and there's nearly double the increase from the previous month which was 9.4 billion dollars but even though we saw a big jump in the overall debt there was a slight dip of 0.6 percent in the revolving credit which includes things like credit cards lines of credit helocs that kind of thing but economists are saying that if we see another drop in July in the July numbers it might mean some consumers are actually hitting their credit limits and if that happens we'll be in for a Slowdown in spending during the second half of the year and like I said earlier despite the month over month decline in revolving credit credit card debt Weighing on the United States consumers it's at an all-time high of more than one trillion dollars now even after steadily rising over the last decade credit card debt levels started easing up in March of 2020 when the government started sending out stimulus checks to help households whether the c-19 pandemic they fell by more than 100 billion dollars the following year dropping to 736 billion dollars in April of 2021 but then they started Rising again sharply again during the booming recovery and now above their pre-pandemic Trend total credit card debts sitting at about 11.6 percent higher than it was a year ago and this is actually down from a recent high of 18.4 percent in September of 2022. now as a share of disposable income Debt Service payments they're about where they were before the pandemic hitting 5.7 seven percent in the first quarter of the Year basically credit card interest rates along with mortgage rates and other types of financing that rely on charging interest they've pretty much been skyrocketing as the Federal Reserve has been raising the rate at which banks can lend money to each other now I don't know if you guys have noticed but the average Commercial Bank interest rate on credit card plans is now above 20 which is up from the 14 and a half percent in February of last year before the Federal Reserve started slowing the economy with those rate hikes that's the highest level on record for a payment method that's traditionally one of the most expensive ways for consumers to purchase goods and services GDP and all that's doing better but we're really not sure if it's doing anything meaningful nor improving things for workers and consumers now a recent poll by Lending Club found that a majority of Americans say that they're living paycheck to paycheck specifically in May of 2023 when the poll was taken 57 percent of consumers live paycheck to paycheck more than 72 percent of people making less than 50 000 a year lift paycheck to paycheck meanwhile sixty point nine percent of people making between fifty thousand and a hundred thousand dollars annually live that way and the Census Bureau data shows that 85.4 million Americans use credit cards to pay their expenses in the last seven days for most people credit card use has been going up recently for regular expenses including food and laundry what about you guys remember you don't have to go down with the ship there are still options and very good options by the way now if you own a home make sure your home is protected get your free home warranty quote there's a link in the description down below now one thing's for sure it pays to be updated during these uncertain times and so this is why I highly recommend subscribing to the channel and also tapping that notification Bell that way you don't miss out on any of my important financial news and updates for you guys and hey I totally wouldn't mind if you guys hit that like button always appreciate that but back then the economy was run on gold and people's paper notes were actually backed by gold deposits in the bank y'all remember that I sure don't because I wasn't there but I read about it but back then the bank gets a bit too excited about lending money and realizes that they can do it without losing their purchasing power so more lending happens and the economy grows like never before but like any good thing this boom also leads to a deleveraging phase either with too much inflation or deflation now if we go ahead and fast forward to today you got central banks like the Federal Reserve in the mix and they can mess with the boom bust cycle by adjusting interest rates lowering interest rates encourages borrowing and spending making it cheaper for businesses and for individuals to take out loans for Investments for purchases and other economic activities now this increase in borrowing and spending it boosts economic growth leading to a period of expansion and prosperity however as the economy grows and inflation starts to rise the Federal Reserve May respond by raising interest rates to control inflation higher interest rates makes borrowing more expensive leading to to reduce consumer spending and business Investments the tighter credit conditions slow down economic growth and the boom phase starts to transition into a bust phase now during the bust phase the economy experiences a Slowdown or a recession reduced spending business Investments and economic activity they lead to job losses and decrease consumer confidence as a result the economy contracts and businesses they might start to struggle ultimately causing bankruptcies and financial distress sometimes even a full-blown recession now to combat the recession and stimulate economic growth the FED May then lower interest rates yet again now the move aims to encourage borrowing and spending rekindling economic activity and starting a new boom phase again the cycle of lowering and raising interest rates by the FED it can create a self-reinforcing loop of boom and bus periods when interest rates are low businesses and individuals may be more inclined to take on riskier investments and excessive debt contributing to speculative Bubbles and asset values asset markets like the real estate market or maybe even stocks hey even the bond market for that matter and these bubbles they can lead to unsustainable growth which would be followed by a very sharp correction maybe even a crash resulting in a bust phase so you get it guys now predicting the optimal timing and magnitude of interest rate adjustments is very complex and there is a risk of over stimulating or overheating the economy during a boom or tightening credit conditions too much during a bust making the economic downturn even worse I think most of us have seen that in our lives here in America but if this is what's happening with the FED why does the FED just stay their butts out of it not mess with interest rates and let the economy do its thing naturally oh well but right now we're in the middle of a deflationary deleveraging period and things might get a little bit tougher economically what the central banks decide to do will determine if this ends up as inflationary or deflationary outcome how long and how bad had this phase lasts really depends on things like government solvency and how productive the economy can be now there are some potential factors that could help like advances in technology more people in the population you know maybe a millennial Baby Boom cool things with artificial intelligence better energy sources and you know maybe even going back to actually having some sound money practices at the individual level it's all about diversifying your wealth and making sure that you don't have all your investment eggs in one basket you know investing in assets like gold silver platinum and Bitcoin it's all about embracing Financial sovereignty and also making informed choices now of course a lot of just depends on your personal financial appetite and your own personal financial situation you just got to do your homework and you got to do what's right for you I mean there is a reason that this is not taught to us in school the higher-ups they they don't really want us to wise up and gain financial literacy because that would mean us escaping the rat race and actually becoming financially free and then they wouldn't have the slaves that they have every day in the workforce killing themselves every single day just to get a little bit of a paycheck let me just go ahead and break it down a little bit more here so while Society wants you to be financially stupid you will always be dependent on your boss employer it's very easy to convince you to buy things you don't need you're giving Society more money because you don't know how to keep it I just need to say this if you don't know how to create your own side hustle your own side income or save some money you will always be at the mercy of your boss or your employer and that means you have to live by their rules their conditions because well you need their money to survive it's not the most freeing situation you know what I mean so what can you really do in this situation saying no to your manager might get you replaced or even fired but you need that paycheck so you end up saying yes and if you don't know how to budget your money it's very easy for corporations to convince you to buy things that you don't really need they show you all these nice things and if you're spending recklessly might as well make them richer right but it's not you who benefits then there may be the shiny car that you've been Desiring right the dealership is like hey we like you so you know you can put down only ten percent of that luxurious 50 000 car and then you can pay it back over 10 years with just a little bit more interest nothing too crazy now of course it sounds appealing but here's the thing guys that little more that little extra interest definitely adds up over time and the dealers end up making a lot more money than you think especially knowing that the dealerships make a lot of their money if not most of their profits from the financing Department you could have saved those extra thousands of dollars instead of letting them just kind of slip into the Dealer's Pockets some people confuse this kind of spending as an investment but it is not an investment an investment is putting money behind something that is expected to be profitable or that will provide future benefits paying back a loan doesn't count as an investment it's just fixing you into a hole that you dug for yourself there's budgeting a crucial skill that can make a huge difference in your financial Journey when you know how to manage your money wisely you're less likely to fall for Unnecessary spending traps corporations and marketers they thrive on convincing you to buy things you don't really need but when you have a solid budget in place you could resist the temptation and actually focus on what truly matters to you and let's talk about how people justify their materialistic purchases by saying that they're contributing to the economy it's true our economy thrives on all these different purchases but it doesn't mean that you have to go overboard many workers live paycheck to paycheck because they just don't invest in their own future but guess what guys schools They Don't Really teach us about money because it's not in their best interest to do so so it's up to you to educate yourself on personal finance and to make smarter money decisions you gotta break free from the cycle of consumerism and financial dependence read some personal finance books educate yourself and take control of your financial future pick up some personal finance books like Rich Dad Poor Dad or why didn't they teach me this in school 99 personal money management tips to live by that way you won't be fully dependent on corporations or bosses and you could pave your own way to Financial Freedom