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At SchiffGold.com, Peter Schiff warns about the increasing trend among Americans of paying for life’s essentials—think food and fuel—on credit. Add in the rapidly increasing interest rates on that credit, and you can see the trouble ahead. Schiff concludes:
According to MarketWatch, “Americans appear to be relying more on debt to pay for their purchases. They are also using more ‘buy now and pay later’ plans.”
Peter pointed out that breaking down retail sales reveals the strain felt by consumers. Categories like food are up. But electronics sales are down.
[Americans] are spending more on shelter. They’re spending more on energy. They’re spending more on food. They’re spending more on insurance. They’re spending more on healthcare. They’ve got to make these expenditures. They have no choice. And the problem is when they finish buying all the things they need, they don’t have much left over for the things that they want.”
The consumer credit data reveals the same thing. While credit card spending surged in August, non-revolving credit tanked. That represents borrowing for big-ticket items. So, Americans are using credit cards to pay for the basics like food and gas, and they’re not making bigger purchases at all.
Peter goes on to explain why an economy built on consumer spending isn’t something to brag about.
Read more here.
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