This Chart Tells You the State of the American Household

Debt is a Killer in a Rising Rate Environment

The United States economy is base on us, the consumer. If the consumer is strong, the US economy is strong. BUT, if the consumer is weak so goes the United States economy.

Since 2020, the American house hold has save less and less. Then in March of 2021 the savings rate and consumer loan rate crossed paths. If you think back when markets topped in December 2021 consumers where well on their way to all time highs in consumer loans.

Fed Chairman Powel yesterday said they will continue to raise rates even if it mean 2 million people will loose their jobs. That will bring unemployment up to 4.6% ish. Elizabeth Warren was having a aneurism about that. Click here to watch. Now depending how you look at unemployment, this could be bad or good. Yesterday I was at my wife art studio and ran in to another artist who works next door. She shared with me that today was her last day at the part-time job she was working at. Her statement to me was, ‘I just can’t work THREE jobs’. She went on to tell me she dropped the lowest paying job and got an increase in hours at the highest paying job. Could the unemployment rate being at its lowest, be a product of people having three jobs? Possibly.

We are in or headed to a recession because of all the ‘Candy’ ( QE) we have been feed over the last number of years since the Financial Crisis and now we are have sugar withdraws ( recession, rising unemployment). Normalizing the markets and cost of money is needed. If this isn’t addressed we will pay in other ways that have larger long term effects.

Tesla Down in Pre-Market Open