They put it all on the Internet, too. Scroll through the
numbers, and before long you'll have what amounts to a crash course in how
rapidly the debt levels have grown during just one generation.
New car loans, for instance: In June 1971, the total amount
financed averaged $3045 for 35 months. Fast forward to Nov. 2004, and the
amount financed averaged $23,984 over 60.5 months.
But that's just for starters. To see what real growth in the
debt levels looks like, "revolving credit" (also known as credit card
debt) is the place to look.
The Fed began keeping records on revolving credit in January
1968; the outstanding amount in that month was $1.4 billion. Jump a little more
than five years ahead and you come to the first month that revolving credit
exceeded ten billion, $10.2 in June 1973. Barely eleven years later came the
one hundred billion threshold, $106.26 in December 1984. Near the end of 2004
(November), revolving credit stood at $782.15 billion.
That's a whole lotta credit card debt. As you scroll the
data, you do occasionally notice a marginal decrease in the monthly debt
figures, but "more" and "bigger" is the rule....
.... until November's number, that is. As large as $782
billion sounds, it's actually an 11% annual rate decline from October, the
single largest one-month drop since the Fed began keeping records in 1968.
Now, this data is always subject to "revision,"
and one month does not a trend make. That said, it's amazing to me that a
decline of this magnitude received so little coverage in the financial press.
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