Why would inflation make me buy a non-yielding metal like...

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Skol

32,984 Posts.

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11/09/22

15:21

Post #: 63636275
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Originally posted by swaggytrader: ↑

UK and the US leading the way on credit card usage.
With US inflation recently hitting 9.1 per cent, its highest level in more than 40 years, Americans are increasingly looking for ways to keep up with the rising cost of living. Like Australians, Americans are seeing their inflation adjusted purchasing power evaporate before their eyes and many are struggling to make ends meet.
According to data from the US National Energy Assistance Directors Association, more than 20 million US households, or almost one in six, are behind on their utility bills.
As Americans seek to keep up with rising costs, they have increasingly turned to revolving forms of credit such as credit cards to maintain their standard of living.
According to data from the US Federal Reserve, recent months have seen some of the largest expansions of revolving consumer credit in American history.
With Americans adding more than $37 billion (US$25 billion) to their collective credit card and line of credit balances during March alone.
While this needs to be put into the context of an economy with an annual GDP of $36.9 trillion (US$24.8 trillion), the recent expansions in this type of credit have arguably been a significant driver of recent economic activity at the margins.
Since the start of the year, Americans have expanded their revolving consumer debts by an average of more than $20 billion (US$14 billion) per month. In the decade prior to 2022, the average monthly expansion was a significantly lower $2.5 billion (US$1.68 billion) per month.
This is arguably a contributing factor in the relative strength of US retail sales in face of rising consumer prices.
While the most recent data release showed roughly flat retail sales on a month on month basis, without Americans turning to the plastic, one would imagine things would look significantly more challenging.

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Why would inflation make me buy a non-yielding metal like gold?

Gold's plunging.

Last edited by Skol: 11/09/22
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0 Great analysis

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