Don't Stress About This Trillion-Dollar Debt

Credit-card debt recently topped $1 trillion. That might sound scary. But once you look at it the right way, it's not as bad as it seems. [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] Don't Stress About This Trillion-Dollar Debt By Brett Eversole --------------------------------------------------------------- Consumption keeps the economic engine humming... Consumer spending drives growth in the U.S. After all, it makes up about two-thirds of our overall economic activity. Most folks think there's a big problem with consumption right now, though... Ask anyone, and they'll tell you the American consumer is on his last legs. Many Americans received hefty payouts during the pandemic. But they've spent a lot of that stimulus along the way. And now, they're turning to another source to keep that spending going: credit cards. Credit-card debt recently topped $1 trillion. That might sound scary. But it's not. The situation isn't as extreme as you might think – once you look at it the right way. And that means the American consumer isn't about to disappear just yet. Let me explain... --------------------------------------------------------------- Recommended Links: [Must See: Subscriber's Viral Holiday Video]( Have you seen this Thanksgiving message from one of your fellow readers yet? He retired early thanks to ONE investing idea that doesn't involve stocks... options... or cryptocurrencies. And he has kept on enjoying retirement – worry free – right through all of the volatility of the past year. The secret? A simple strategy for seeing double-digit annual income... AND triple-digit capital gains... with legal protections (even in an economic crisis). [Click here for his new holiday message](. --------------------------------------------------------------- [Is Your Bank Next?]( A powerful new trend is spreading like wildfire inside the U.S. financial system. At least 41 banks are already involved. But the Federal Reserve predicts that number will grow fast. [See if your bank is involved right here](. --------------------------------------------------------------- It all seems like bad news at a glance... Consumers are racking up credit-card debt. And they're doing it at the worst possible time. Soaring interest rates have pushed the typical rate on a credit card to more than 21%. That's the highest level on record and up from just 14.6% early last year. Higher rates mean debt is even more expensive to maintain. And that makes the massive rise in overall credit-card debt that much more concerning. The pace of the recent hike has been impressive, too. Take a look... Overall credit-card debt has jumped nearly $300 billion over the past two and a half years. That's almost a 40% increase. For comparison, we saw a total increase of just 23% over an entire decade from 2011 to 2021. Combine that rapid rise with the break above the trillion-dollar level, and it's no wonder folks are worried. But you won't learn much from analyzing debt alone... You've got to look at assets, too. That's why I examined the asset side of the equation a few weeks ago. We looked at personal-sector checkable deposits – the [cash that regular folks have on hand](. That number is near $5 trillion today. And once you realize this, the $1 trillion in credit-card debt becomes easier to stomach. Relative to credit-card debt, folks have more cash on hand today than at almost any other time since the turn of the century. Check it out... The chart shows the total credit-card debt divided by personal-sector checkable deposits. It's basically debt divided by cash. And at just 21%, this is near the lowest debt load we've seen since 2000. In other words, consumers hold a record amount of credit-card debt today. But they've got more than enough cash lying around to handle it. Heck, credit-card debt could double from here, and most folks would still be doing just fine compared with history. When you realize this, the debt "problem" doesn't seem so scary after all. These conditions can change, of course. But for now, American consumers are still in good shape. They've got plenty of money to keep driving the economy. And until that changes, there's no good reason to expect a major economic slowdown. Good investing, Brett Eversole Further Reading "Consumers won't stop chasing the latest experiences," writes Sean Michael Cummings. Americans have been willing to shell out big bucks to participate in unique cultural events – whether it's concerts or blockbuster movies. And that's a big win for the U.S. economy... [Read more here](. Recession fears have been at the forefront of many investors' minds in recent months. And yet, the economy is chugging along. One big reason is that the American consumer is flush with cash – so much so, the numbers might surprise you... [Learn more here](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK Moody's (MCO)... credit-ratings firm Visa (V)... payment-processing giant Meta Platforms (META)... social media giant Amazon (AMZN)... online-retail king Microsoft (MSFT)... tech giant Nvidia (NVDA)... chip giant Broadcom (AVGO)... semiconductors IBM (IBM)... computers Adobe (ADBE)... cloud services Zscaler (ZS)... cloud security Uber Technologies (UBER)... ride hailing Hilton Worldwide (HLT)... hotels Chipotle Mexican Grill (CMG)... tacos and burritos Ross Stores (ROST)... "everything" stores Williams-Sonoma (WSM)... cookware and decor Abercrombie & Fitch (ANF)... apparel General Electric (GE)... manufacturing Ingersoll Rand (IR)... manufacturing Motorola Solutions (MSI)... telecom NEW LOWS OF NOTE LAST WEEK Bristol-Myers Squibb (BMY)... pharmaceuticals Agilon Health (AGL)... management-services organization Franco-Nevada (FNV)... gold royalties --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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