Posts Tagged ‘rate’

“This number (10-year treasury note) is probably the most important number in modern capitalism. It tells us the ‘risk-free’ price of money… which is to say, it tells us the cost of borrowing money, or more abstractly, the price of the future.

The more you borrow today, the more time you will have to take away from tomorrow to pay it back. Eventually, you run out of time… and out of luck.

To put that in more concrete (or wood and plastic) terms, the higher your mortgage rate… the longer you have to work to pay for your house.” -Bill Bonner

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“The U.S. 10-year bond yield rose to a seven-year high of 3.24% – nearly 2% above its bottom in July 2016.

This 2% increase, imposed on $68 trillion of debt, is equal to an extra $1.3 trillion in interest charges….

To look at it another way, the typical working person who works an average of 33 hours per week earns $26 an hour. His percentage of the total debt is about $500,000.

At today’s interest rate, he will have to work 558 hours – or three and a half weeks (not including taxes) – just to keep up with the interest payments. Clearly, this is impossible…” -Bill Bonner

Debt Trend

Posted: June 5, 2018 in Debt
Tags: , , , , , , , ,

“We’re seeing people carrying much more debt than in previous generations into retirement.” -Ron Rhoades WKU

“Younger people are taking on debt at a higher rate and paying it off at a lower rate.” -Lucia Dunn  OSU

Money Magazine

“Consumers now own a mountain of credit-card debt in excess of $1 trillion – the highest level since before the 2008 financial crisis.  Meanwhile, the savings rate for consumers dropped to just 2.9% as of November, versus nearly 6% just two years ago. The only time Americans have been saving less than today was 1929-1931 – during the peak of the Great Depression.  In other words, Americans are borrowing more and saving less than virtually any time in history.  How long can that last?” -P.J. O’Rourke

“Inflation is the creation of money and credit beyond the savings rate.  You see, the real impact of this new money comes when it enters the banking system.” -Porter Stansberry

“At more than $1.4 trillion in loans outstanding, student loan debt is nearly four times bigger than all the debts of Greece.  And it’s still growing at nearly 20% a year… multiple times faster than the official rate of inflation.  Worse, the government’s own data has showed as much as 30% of this debt – nearly one out of every three loans – isn’t being paid or is already in default….

At more than 1,000 schools – representing about one-quarter of all U.S. colleges and trade schools – more than half of students have already defaulted or failed to pay even one dollar toward these loans within seven years of leaving school.  Across all schools, the data show as many as 40% of borrowers haven’t paid a single dollar toward these loans within seven years.  Looking at just the past three years, this number jumps to more than half – 54% – suggesting this problem is only getting worse, not better.

In other words, according to the government’s own data, at least 40% of this debt – representing more than $500 BILLION that has been packaged up, ‘securitized’, and sold to investors as ‘money good’ – will likely never be paid back at all.” -Porter Stansberry

“No matter how skilled you are as an investor, upping your savings rate is more powerful to your wealth than either increasing your income or increasing your investment returns.  That’s because it’s a one-two punch… you increase what you have to invest, while decreasing what you spend.  You also learn how to live longer on less money….  Remember that ultimately, how much you save will be the difference between a lifetime of poverty… or one of wealth.” -David Eifrig