With this in mind, let me bring to you the latest fact about debt, the fact that rings multiple bells for me. According to the data from the U.S. Federal Reserve, household debt in the U.S. has, as of the end of 1Q 2017, exceeded pre-2008 peak levels and hit an all-time high by the end of March.
Let’s crunch some numbers.
- Total Household Debt in the U.S. stood at USD 12.725 trillion at the end of 1Q 2017, up on USD 12.576 trillion in 4Q 2016. Previous record, reached in 3Q 2008 was USD 12.675, while the pre-Global Financial Crisis average was USD 10.112 trillion.
- During pre-crisis period, Mortgage Debt peaked at USD 9.294 trillion in 3Q 2008. In 1Q 2017 this figure remained below this peak levels at USD 8.627 trillion. As flimsy as house price valuations can be, this means that there is no ‘hard’ asset underlying the new debt peak. If anything, the new overall household debt mountain is written against something far less tangible than real estate.
- Student loans are up on previous peak (4Q 2016 at USD 1.310 trillion) at USD 1.344 trillion, as consistent with continued growth in the student loans crisis in the U.S.
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