New data from the Federal Reserve continues to highlight a reemergence of debt based consumer spending. Americans are largely buying stuff they can’t afford with money they don’t have. The Fed’s consumer credit report highlights a troubling trend. Over the last 12 months 95 percent of all consumer debt growth has come from people buying cars and young Americans going deep into debt to pursue a college education. A car quickly loses its value once it drives off the lot and many college degrees are massively over valued only being supported by easy financing. This is a disturbing trend, even more troubling than the last debt fueled bubble. One can argue with housing that at least people are getting an asset that generally rises with inflation. But a car? A for-profit degree? The debt juice is now flowing once again.
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