A Sinking Economy: Is It The Trade War Or Debt?

A Sinking Economy: Is It The Trade War Or Debt? by Dave Kranzler for Investment Research Dynamics

In April credit card debt was once again the largest contributor to the new all-time high in consumer debt, increasing by $7 billion vs. a decline of $2 billion in March. Student loan and auto debt hit all-time highs of $1.6 trillion and $1.16 trillion, respectively. I found the credit card debt numbers interesting because a report released by Experian showed that 23% of Americans need credit card debt to pay for food and rent – i.e. make ends meet.

The Achilles Heel of the U.S. economic and financial system is debt. Easy credit artificially stimulated the U.S. economy (and global economy) for the last 8 years. Most households are running out of their capacity to take on more debt, which means consumption – 70% of economic activity – is going to contract.

Rethinking The Dollar invited me to discuss the trade war, the economy and precious metals and why stock market catastrophe is baked into the cake:

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Dave Kranzler

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.