52 Percent Americans Have Less Than $2,000 in Their Bank Accounts,’ Chris Vermeulen Opens up About Beginning of ‘Economic Downturn
Anjali Belgaumkar5 Jun 20242 min read
Chris Vermeulen, Chief Market Strategist of The Technical Traders.com, recently spoke to David Lin. Chris commented that we seem to be entering a topping phase in the market. He explained that the market typically goes through four stages, and while he didn’t delve into all the details, he believed we were currently in this topping phase. He observed certain assets gaining momentum and shifting dynamics.
Additionally, he noted that broader economic indicators, such as unemployment rates crossing above the 24-month moving average, have often preceded financial corrections or crises historically.
Chris noted that rising unemployment typically signals tougher economic times ahead. He highlighted a concerning trend he had mentioned months ago: despite inflated prices and inflation, people are still spending, leading to potential financial strain.
Many Americans have minimal savings, and the situation could worsen as more people run out of money due to unemployment. Many people live paycheck to paycheck, with statistics suggesting that 52% of Americans have less than $2,000 in their bank accounts at any time.
Chris also pointed out a shift in savings patterns. A surge during the COVID-19 pandemic is now giving way to a rise in credit card debt as people deplete their savings. He believes this could mark the beginning of a significant economic downturn.
“Maybe people are spending money; that’s why their savings rate is decreasing. You want consumption to pick back up, especially since nobody was spending money during the pandemic because they were locked down. Therefore, the economy didn’t do too well. The other way to look at it is you’re right; they don’t have money to spend; they must use their credit card. He said that ” delinquency rates on credit cards are rising; they’re now at the highest level since 2011,” he said.
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