Fed Up with The Fed

To boost the slowing U.S. economy, the Federal Reserve began buying $60 billion Treasury bills each month for at least six months. 

The next day, the New York Federal Bank flooded the markets with temporary liquidity to the tune of $104 billion. The initiative was rolled out in two parts: a one-day and a 15-day repo operation.

And yesterday, the Federal Reserve juiced its repo loan program, pumping in another $58 billion into Wall Street securities firms. 

“Legal” Loan Sharks

In the U.S., while the White Shoe Boys gang gets almost interest-free money to feed their gambling addiction, the Bankster Bandits screw the nation’s workforce of 183 million people… plantation workers of Slavelandia, who bear the brunt by paying outrageous “vig” from credit card loan sharks.  

The higher the credit card debt rises in the U.S., now at $4 trillion, the more the loan sharks raise the rates. 

Despite the Fed’s rate of 1.75 to 2.0 percent, the average annual credit card percentage rate (APR) for “we the people” is 17 percent… the highest in 20 years.  The average APR for brand-label credit cards is an astounding 27.5 percent.

American households are drowning in credit debt, averaging $8,602 in the second quarter, up 8 percent from the same quarter in 2015.

Us vs. Them

With student debts at $1.6 trillion and as Americans struggle to pay off their debts, holding debt is no problem for corporations.

In August, bond-rating firms Moody’s and S&P Global allowed some corporate giants deep in debt to keep their investment-grade bond ratings. Newell Brands, Inc.; Kraft Heinz; and Campbell’s were among the beneficiaries. 

Low interest rates drove the borrowing boom to $10 trillion, about a 60 percent increase from pre-financial crisis levels. 

Jailed for Your Debts

Meanwhile, reporting from the ground in Coffeyville, a small town in Kansas, shows another trend across America: Debt collectors threaten people who owe them with bail or a prison sentence. 

Once a month, mostly hospitals, doctors, and ambulance companies take their broke patients to court in an attempt to reap their exorbitant fees.

The judge in Coffeyville is a cattle ranger without a law degree. He gets a commission from the money he brings in. 

The Electric Slide

As we have long noted in the Trends Journal, an important consumer trend indicator is auto sales. 

For example, in India, which is not affected by the business media “trade war” line, auto sales last month plummeted 41 percent from a year earlier.

In the U.S., where the so-called “trade war” is not a pressing nor conscious consumer concern, auto sales fell 0.9 percent in September, the most in eight months. 

Thus, the auto (and general retail) slowdown is a direct result of stagnating wages and high debt burdens.

On the electric vehicle (EV) front, “The Electric-Car Fantasy,” one of our Top Trends for 2017 about the overblown hype of EVs, is on-trend while the mainstream business media still falsely promotes EVs as a booming trend. 

The latest casualty is Harley Davidson. They halted the production of LiveWire, Harley’s first electric bikes, because of problems with charging equipment. 

Expensive batteries take ten hours to charge and will only take riders 140 miles before running out of energy. 

In July, Harley cut its estimate for bike shipments. However, they intend on growing their international business. They estimate by 2027, some 50 percent of their revenue will be from gasoline and electric sales to foreign markets. 

In China, sales for electric cars, new energy vehicles (NEVs), have fallen for the third month in a row, dropping 34.2 percent in September from same period a year ago.

Helping to push NEV sales lower, the Chinese government pulled subsidies back from all but a few top performers. 

Ford’s Chinese partner in electric cars, Zotye Automobile, hasn’t been paying their bills to the makers of their lithium batteries. Zotye is suing for rmb 40 million ($5.6 million) in assets. Their joint venture with Ford, announced in 2017, slid downhill because of the dropping auto sales, which sank 34 percent in September, the third consecutive month of reduced sales.

TREND FORECAST: While the transition to multi-fuel cars will accelerate, the technology of electric or NEVs is not being mastered. The problem of recharging batteries, an 1800s invention, limits NEVs’ mass market acceptability.

Until a new, more effective energy-storing technology is invented, EV/NEV market share will not exceed 5 percent of global auto sales. 

We also forecast that breakthroughs in combustion-engine development and higher-efficiency motor oils that significantly increase miles per gallon and diminish pollution could further stall the move toward NEVs.

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