It’s only a matter of time before the next shoe drops and you will start hearing about the massive defaults in consumer credit card payments. The stock market has not produced any wealth in the last 8 years. Home prices have come down sharply and will continue to fall for the next couple of years. The only place left to turn for the average American to maintain the world’s highest standard of living is their credit card.
Unfortunately, credit cards are the highest priced debt on the menu. The average balance and delinquency rate has been rising steadily in 2008. As the credit crunch moves from the 3rd to the 4th inning banks will start to tighten credit standards and raise the interest rate on the current credit card balances. None of this will be good for the economy or housing prices. It is going to take years to unwind the credit mess.
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