Drowning In Debt: Delinquencies Are Surging And It’s Only Getting Worse

This isn’t a good sign.

I need to also mention that the higher inflation continues to run – which is already well above the Fed’s 2% annual target. And they have no plans of stopping it – the less ‘real’ disposable income people will have.

Thanks to the near-decade of low-rates and easy money from the Fed, most investors and consumers suffer with a sense of false confidence about the economy.

For instance, traders using cheap margin to buy and sell global assets, companies using debt to buy back their shares, and home owners simply re-financing their mortgages with lower rates to use the extra debt to buy things.

When only low-interest payments are due – this bubble can float on.

But now as rates are rising and the Fed is attempting to tighten, it will cause problems.

Minsky was on to something when he studied the booms and busts of economies throughout history and how they flow like clockwork. 

The cheap debt and speculative years are ending. Now it’s time for financial tightening.

And unfortunately – as we’re seeing – it looks like many can’t afford this tightening...

So far, the mainstream media hasn’t put ‘two-and-two’ together with all this. They treat each poor economic news story as if it’s an isolated incident, rather than interconnected symptoms of a worsening disease.

The rising delinquencies in various debt markets – and much more – are signaling deepening cracks in the supposedly ‘healthy and growing’ economy.

What comes next won’t be exactly ‘a good time’.

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Disclosure: With Regards to the VIX and GLD - these positions I've placed are in their  more

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