Veteran Economist Agrees With Elon Musk And Michael Burry: Rising Credit-Card Debt Spells Economic Trouble


A renowned economist and other influential figures in the financial world have raised concerns about the potential economic consequences of surging credit card debt among American consumers. Carl Weinberg, Chief Economist at High-Frequency Economics, recently warned that consumers are increasingly relying on credit card debt to finance their spending, with interest rates spiraling out of control. This trend could lead to a pullback in consumer spending and ultimately result in an economic slowdown in the new year.

Weinberg’s prediction aligns with earlier warnings from Tesla CEO Elon Musk and investor Michael Burry. Musk had previously expressed concerns about high levels of consumer debt, emphasizing that the inability to pay off these debts could lead to significant financial distress. Burry also cautioned in 2022 about a potential economic slowdown and recession due to increased consumer spending amid rising prices and interest payments.

These concerns are rooted in the brutal inflation and climbing borrowing costs faced by American consumers over the past 18 months. Recent data from the New York Fed revealed that credit card balances escalated by nearly 5% to a record $1.1 trillion in the last quarter, with delinquencies and overall debt loads also increasing.

Despite the alarming trends, Weinberg does not predict a full-blown recession. He expects the Federal Reserve to significantly cut rates next year, which could alleviate some of the economic pressures caused by high credit card debt.

It is important to note that credit card debt has long been a significant issue in the United States, with many consumers struggling to manage their debt and pay off high interest rates. However, the current economic climate and the potential for a slowdown in consumer spending amplify the concerns surrounding this issue.

As consumers continue to finance their spending through credit cards, it is crucial for individuals to be mindful of their borrowing and spending habits. It is advisable to create a budget, track expenses, and prioritize paying off high-interest debts to avoid falling into financial distress.

In conclusion, the warnings from economists and industry leaders about the surging credit card debt among American consumers highlight the potential economic fallout that could occur. As interest rates continue to rise and consumer spending slows down, it is essential for individuals to manage their debt responsibly and take proactive steps to avoid excessive reliance on credit cards.

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