Charge-offs on U.S. credit cards gauged by a Moody's index surpassed 10% in May

peaks at around 12% in

second quarter of 2010

Charge offs tend to parallel U-3 unemployment

12.x% unemployment would be the highest number registered on U-3

we allow banks to

a relentless ratcheting upward of average interest rates charged on card balances which will not abate until the charge-off rate comes down.

This in turn will stomp on consumer discretionary income and spending, since money paid in interest obviously does not get spent at the local Best Buy purchasing a new flatscreen TV.

Consumer spending has "enjoyed" a roughly 5% increase over "natural and sustainable" levels over the last five years due to "fog-a-mirror" credit policies.

The outcome of all of this, by the way, is an essentially-permanent 4% reduction to GDP that will be reflected in forward economic performance, and that's before the impact of unemployment is added in.