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Of Interest to Investors, Survivalists and Others Concerned About Their

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With a focus on the Plutocrats, Goldsmiths, Super-Rich Insiders, and their Allies and

what they are conspiratorially doing to manipulate the financial markets, make more

profits, rip us off and install a world government under their control

The Goldsmiths—Part CXLIX

By R. D. Bradshaw

The Goldsmiths 148 discussed the present situation of a huge number of people, who in the last two years, are finding that they don’t have the money needed to live on and buy consumer goods. The main problem for many persons now is that the Rothschild Cabal imposed deflation and depression tactics are hurting people generally. Hence, the US unemployment rates are growing daily (at least 31 million Americans are now unemployed and possibly as many as 40 million). Most or many persons are now finding that they lack money to buy consumer goods, beyond essential levels.

Yet, the one thing that is happening on this theme is that there does not seem to be any drying up of merchandise for sale. Too, there are no appreciable price decreases (instead, most prices seem to keep going up). But what is happening is that increasingly people don’t have the money needed to buy goods (this means that there is a shortage of money among the people). So far, there has been little or no inflation from too much money chasing too few goods. What little money most of us have is being used to buy essentials and pay banks for their outrageously high service charges on debts.

How are People Surviving with a Shortage of Money for Basic Needs?

So, how are people surviving when they face a shortage of money, concurrent with at least a need for essentials and a few other items. The answer here is the obvious. In the main, many people are living on credit cards. This Goldsmiths will tackle that issue and the impact that it is having on most consumers and on the financial sector.

Yes, for many people out of work and in a hurt, they are turning to the use of credit cards to live on. In citing this reality of our time, there is no intent to imply that this use of credit cards is for wasteful living. Instead, in many/most instances, people are using credit cards for essentials. And to add to the woes of credit card users, the credit card companies continuously raise the interest rates and numerous charges for being late, missing a payment or some other problem debtors may face. Some interest rates are now at 20 to 70% per annum.

With the way things are moving in the credit card business, in this context, it is clear that credit card failures will be one of the next big areas for massive bank losses.

Actually, HuffingtonPost.com set the stage for this crisis back on Feb 24, 2009 in an article on The Credit Card Debt Crisis: The Next Economic Domino. In sequence, this article listed the previous banking crisis, employment crisis and mortgage foreclosure crisis. And per the story, a credit card crisis is next on the way. In the way of a backup supporting the idea of a credit card crisis, the report noted that credit card balances had reached a record level in 2008 (at $951 billion) coupled with a disquieting number of risky borrowers with low credit ratings (although credit card companies have been trying to cut back on credit card authorizations/levels in the last two years). This profile, per the story, spells a coming crisis.

To add to the problem, there is a serious question mark about how many of these credit card balances have been packaged up and sold as derivatives to some other party? Then there is the question of how extensive has credit swaps or other credit insurance protection tactics been employed to manipulate the credit card markets?

The Data

Here are some statistics on the problem from www.creditcards.com:

• Average credit card debt per household with credit card debt: $15,788
• Total credit cards in circulation in U.S: 576.4 million, as of yearend 2009 (Source: Nilson Report, February 2010)
• Total debit cards in circulation in U.S: 507 million, as of yearend 2009 (Source: Nilson Report, February 2010)
• Average number of credit cards held by cardholders: 3.5, as of yearend 2008 (Source: "The Survey of Consumer Payment Choice," Federal Reserve Bank of Boston, January 2010)
• Average APR on new credit card offer: 14.31 percent (Source: CreditCards.com Weekly Rate Report, June 2010.)
• Average APR on credit card with a balance on it: 14.67 percent, as of February, 2010 (Source: Federal Reserve's G.19 report on consumer credit, May 2010)
• Total U.S. revolving debt (98 percent of which is made up of credit card debt): $838 billion, as of April 2010 (Source: Federal Reserve's G.19 report on consumer credit, June 2010)
• Total U.S. consumer debt: $2.44 trillion, as of April 2010 (Source: Federal Reserve's G.19 report on consumer credit, June 2010)
• U.S. credit card 60-day delinquency rate: 4.27 percent. (Source: Fitch Ratings, May 2010)
• U.S. credit card default rate: 11.37 percent. (Source: Fitch Associated Press, Mar 2010)

• Total Purchase Transactions in CY 2009 for all Credit Cards: $1.76 trillion

Top 10 credit card issuers worldwide. (Ranked by total worldwide as outstanding)

1. Bank of America/MBNA - $194.70 billion. (Includes outstanding from U.S., U.K., Ireland, Canada, Spain).

2. Chase - $184.09 billion. (U.S., Canada, France, Germany, Ireland, U.K., Mexico, & 22 other countries).

3. Citi - $148.90 billion. U.S., Canada, Mexico, Brazil, Australia, Korea, Taiwan, Hong Kong, & 34 other countries).

4. American Express - $105.00 billion. (U.S., Canada, Australia/New Zealand, U.K., Mexico, Italy, Japan, France, Germany, Hong Kong, Singapore, & 34 other countries).

5. Capital One - $68.78 billion. (U.S., Canada, U.K.).

6. HSBC - $58.50 billion. (U.S., U.K., Mexico, Hong Kong, Turkey, Canada & 45 other countries).

7. Discover - $49.60 billion (U.S.).

8. Wells Fargo - $36.40 billion (U.S., Canada).

9. Barclays - $32.60 billion. (U.S., U.K., Germany, South Africa & over 30 others).

10. Lloyds TSB/HBoS - $19.29 billion. (U.K.). (Source: Nilson Report, December 2009).

Profits or Losses at Top 10 U.S. Credit Card Issuers in 2008:

1. Chase: $780 million profit.

2. Bank of America: $520 million profit.

3. Citi: $530 million loss.

4. American Express: $850 million profit.

5. Capital One: $1.00 billion profit.

6. Discover: $710 million profit

7. Wells Fargo: $990 million profit.

8. HSBC: $520 million profit.

9. US Bank: $1.07 billion profit.

10. USAA: Not listed

(Source: Nilson Report, March 2009)

Karl Denninger, at www.market-ticker.org, had this story on Dec 15, 2009 on Is that a Door Slamming?: “Citibank card charge offs 10.29% .vs. 8.79% (all month-over-month) and $617 billion in ‘Citi Holdings’ (worth god only knows what), a cutesy game of asset-shifting and sausage-hiding the bank set up after Pandit came to power.

“Capital One 9.6% .vs. 9.04%

AXP falls to 7.6% (that's actual improvement; was 7.8% last month)

JP Morgan/Chase, 8.81% .vs. 8.02%.

Bank America, 13% .vs. 13.22% (is that percentage even believable?) but lates are up to 7.69% from 7.59%.

Discover, 8.98% .vs. 8.54%.

“(All charge-off rates annualized, but lates are current percentage of loans and banks use different definitions - some 30 days, some 60, etc. Once a loan goes beyond 60 days it rarely cures.). So much for ‘The Recession is over’ and ‘labor is stabilizing and jobs are even improving a bit.’”

The Bottom Line

The above statistics tell the tale. Credit card delinquencies (one month late to 60 days) are 4.27% and actual defaults are 11.37%. Like Market Ticker concludes, so much for the pap about the recession being over. No, it’s not over and instead it is accelerating. While the banks are cleaning up, so far, with their high credit card interest rates and fees, they are also holding vast sums of credit card receivables which they will not be able to collect on (to the tune of almost 11.37%).

So far, the Fed and the US Treasury have worked hand over fist to try to bail out the big Rothschild Cabal Banks for their real estate mortgage losses (including dole outs of at least four to five trillion dollars since the fall of 2008). But the question of the credit card crisis has not received any focus beyond sharing in the TARP bail-out funds of $700 billion in 2008. It is clear that the banks are sitting on a ticking time bomb with the mounting credit card losses. This will be highly deflationary as these losses mount and as the banks have to accept/eat them.

The big issue now for America is what can the banks do to shift these mounting losses to the taxpayers? Is it possible that the crooked operations of the Fed can someway pick up some of these losses for the big Rothschild connected banks?

On this, my take is that the big Cabal banks are not going to get much more in bail outs from the taxpayers. This means that the Fed will soon start some new secret program to pick up much of these bad credit card debts. This means that Fed watchers need to be on the lookout for some new innovation to rescue these bad debts held by the big Cabal banks. We all need to remember that the Fed is there to help the Banks, not us, the public. As far as gold and silver, my take is that this credit card crisis will greatly help the popularity of precious metals.

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Disclaimer: None of the above is for investment advice. It is for information purposes only.

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