Expect Rising Rates to Crush the Debt-Laden During Deflation

EWI anticipates that social mood is about to accelerate toward the negative, and this includes the development of a deepening deflation.

The April 2018 Elliott Wave Theorist mentioned a list of scenarios to expect. Here's just one of them:

Rising interest rates will cause interest payments to overwhelm the federal budget as well as the budgets of numerous states and municipalities.

By the same token, individuals who are laden with borrowing costs will also be overwhelmed.

Read this excerpt from an April 2, 2018 Bloomberg article titled "Rising Rates Sounding Alarm Bells for Debt-Laden U.S. Consumers":

A healthy economy can be a dangerous thing.

Americans have a history of loading up on debt in good times, then paying dearly when the bills come due. Adding to the pain: A booming economy is often accompanied by rising interest rates, which make mortgages, credit cards and other debt much more expensive.

As the U.S. Federal Reserve raises rates, there are signs that consumers could be putting themselves in peril.

"When consumers are confident, or over-confident, is when they get into credit-card trouble," said [the] education manager at Debt Reduction Services Inc. in Boise, Idaho. The nonprofit credit counseling service has seen a noticeable uptick in people looking for help with their debt, [said the education manager].

Spending on U.S. general purpose credit cards surged 9.4 percent last year, to $3.5 trillion, according to industry newsletter Nilson Report. Card delinquencies are also rising. U.S. household debt climbed in the fourth quarter at the fastest pace since 2007, according to the Federal Reserve.

"There are warning signs out there," said [a] senior analyst at the Aite Group. Especially concerning is a surge in student and auto loans over the past decade, [the analyst] said.

You can read the entire article by following the link below: