Are There More Bubbles Waiting to Burst?

Reports are starting to surface stating that the Office of the Comptroller of the Currency is in a big rush to get information about credit card defaults.  Why is our government in such a rush to get information about credit card defaults? 

Lets think for a second.  The economy is bad, gas is slowly drifting towards five dollars a gallon, huge numbers of people are loosing their houses, unemployment numbers are through the roof, and so on, what do you suppose people are using to stay afloat a little longer?  If people cannot pay anything else it is only a matter of time before they start defaulting on credit cards also.

Is the next bubble to pop in an explosion leaving millions of casualties and destroyed institutions going to be the credit card markets?  It seems like a reasonable assumption. 

I wonder how many people in deep financial trouble, who are barely able to juggle bills, will fill out that credit card application that comes in the mail to get a month or two month breather.  Then another and another until the lenders stop giving this person cards due to “escalating credit.”  Then when that person is no longer able to use one card to pay another what will happen?

The key difference between this bubble and the other recent bubbles to burst is the idea of the minimum payments.   As long as a person can pay the minimum payments it is good way to alleviate some of the stress by spreading out the payments for a long time until you are back on your feet to pay it off. 

The reality is that if you could not afford all of the bills this month and had to stretch the some of this months payments out using a card, not only will you probably have the same problem next month, but you have added a new payment to the list of things you cannot afford to pay.

This may not be a problem, but in thinking this through, it is definitely an area the government needs to be monitoring and to have a plan on what to do if it becomes a problem.

Banks have been absolutely pummeled over the past few months and it looks like there may be a few more beatings on the horizon.  It is like being in the ocean getting pummeled by waves, soon after you get hit by one another one is not far behind ready to crash into you.  Then another and another and another.   

If all of this mumbling about the government being proactive is in fact true, it is definitely a step in the right direction, but the economy may have to get far worse before it gets better. 

I wonder how many waves of bursting bubbles we will have to endure before a way out is found.