By Tyler Durden
Authored by MN Gordon via EconomicPrism.com,
American consumers are not only feeling good… They’re feeling great. They’re borrowing money – and spending it – like tomorrow will never come.
[ZH: In other words, Americans are broke but full of hope…]
On Monday the Federal Reserve released its latest report of consumer credit outstanding. According to the Fed’s bean counters, U.S. consumers racked up $28 billion in November in new credit card debt and in new student, auto, and other non-mortgage loans. This amounted to an 8.8 percent increase in consumer borrowing. It also ran total outstanding consumer debt up to $3.83 trillion.
Perhaps this consumer spending binge will finally propel price inflation, as measured by the personal consumption expenditure (PCE) deflator, up to the Fed’s illusive 2 percent target. Academic economists and central planners consider 2 percent price inflation to be the sweet spot for attaining economic heaven on earth. We have some reservations.
Controlled inflation, or what’s sometimes called financial repression, is what the Fed is after. Because controlled inflation is the grease that keeps the gears of the debt based monetary system turning. You see, through controlled inflation, and the subsequent slow …read more