Tuesday, October 7, 2014

Consumer Credit: To Infinity and Beyond! (Musical Tribute)

The following chart shows consumer credit divided by annual wage and salary disbursements.

Click to enlarge.

Your mission, should you choose to accept it:

Stay in that trend channel forever!

Source Data:
St. Louis Fed: Custom Chart


dd said...

Well at least we're not at the top of the trend channel. Plenty of time for a credit disaster, like a whole year. This must be positive!

Jazzbumpa said...

Interesting find.

I think a low channel failure is inevitable.


The Arthurian said...

Ah yes, the famous early-1990s debt decline. And it came without crisis, and it came without depression. And it gave us the "goldilocks" economy of the latter 1990s, years that Robert Gordon referred to as a "macroeconomic miracle".

Stagflationary Mark said...

dd & Jazzbumpa

Well at least we're not at the top of the trend channel.

I think a low channel failure is inevitable.

We can get back to the top of the channel again if we turn abysmal wage growth into something worse.

In fact, we can get to infinity if wages equal zero, lol. Sigh.

Gallows humor.

Stagflationary Mark said...

The Arthurian,

Study: Borrowing Among Youngest and Oldest Consumers Shifts in Last Decade

“The proceeds of increasing senior borrowings may be used for their own spending as well as to assist family members in supplementing their incomes and making purchases,” Wise said. “At the same time, rising debt levels by older consumers could lead to increased default rates if they are unable to meet higher loan payments with their often fixed incomes. This development certainly bears watching over the next several years."

Behold the new and improved macroeconomic miracle!