Household Debt Reaches New Peak: A Very Deflationary Setup

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Aggregate household debt balances rose by $116 billion in the third quarter of 2017. As of September 30, 2017, total household indebtedness was $12.96 trillion. This increase put overall household debt $280 billion above its 2008 Q3 peak, and 16.2 percent above the 2013 Q2 trough.

Hooray! A New York Fed report on Household Debt and Credit shows household debt hit an all-time high in the third quarter of 2017.

Mortgage balances, the largest component of household debt, which stood at $8.47 trillion as of September 30, saw a $52 billion uptick from the second quarter of 2017.

Balances on home equity lines of credit (HELOC) were declined slightly, and now stand at $448 billion.

Household Debt Composition

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Loan Types 

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Mortgages by Credit Score 

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Auto Loans by Credit Score 

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Deflationary Setup

With stagnant real wages, how precisely is this debt supposed to be paid back?

Here's a hint: It won't.

This increase in unpayable debt is a very deflationary setup.

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment advice. All site content, including ...

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