US Consumer Credit Shows Steepest Contraction in Over 5 Decades

I'm not so sure about deflation, since we've replaced private credit with public credit. But it's nice to see data indicating hyper-inflation is not on the horizon.

And it's interesting to think what the world will look like when Americans are savers and someone else, Asians?, are spenders.

So is this good or bad overall? Because people are giving money to banks, rather than spending it, it should be raising bank's capital. Right? So the Fed won't need to give as much money to the banks, because people are giving it to them to pay down their debt?

OTOH, if people aren't spending, then unemployment goes up, which is bad.

Unless people aren't paying down their debts, but rather going bankrupt and the banks are writing them off. Then we're in trouble.

Looks like consumers had too much credit.

This can be good news for startups. In a deflationary world theoretically VCs won't need as big an ROI, meaning more funding for startups. Well, assuming the startups are doing things in line with the economy. In this case that would be things like bargain shopping, DIY repairs, productivity enhancement, etc. Been done a thousand times before? Then help folks figure out who does it best.