Shopping mall conundrum

An odd conundrum hits me over the head every time I go to the mall. I hear about inflation. I experience inflation. I am told there is inflation. In fact, every bone in my body tells me there is inflation. Yet when I go shopping in a mega-mall (which is once in a blue moon), I pull into packed parking lots and see oodles of shoppers walking out with bags crammed full of goods. Individual shoppers, shoppers with kids, moms, dads, young adults and even teenyboppers all seemingly without regret, happily skip to the cars to load their trunks with stuff jammed into designer bags that look to cost more than the goods inside of them. Look, I know food costs more, gas costs more, Lord knows fire insurance costs a lot more to us folks in California, medical care costs more, candy costs more, cars cost more and everything else costs more. As such, I KNOW clothes and the stuff sold in malls cost more. So how is it all these folks I see party shopping at the mall can afford to buy bags full of stuff that I, as an insurance agency owner and financial advisor, can't afford? I ponder such things. Where are they getting the hundreds, possibly thousands, to buy such a bounty? Looking at credit card debt in the US, the second quarter of 2025 shows the second-highest amount at $1.2 trillion. The only higher quarter was the third quarter of 2024, which clocked in at $1.21 trillion. We can attribute that due to holiday shopping. We see the same spikes in previous third quarters. Putting things into the growth perspective, the third quarter of 2023 was $1.07 trillion and the third quarter of 2022 came in at $.987 trillion. One would deduce these figures do reflect inflation, but unlike sales figures, which are monies spent, debt figures are money borrowed, and that kind of money adds to personal debt totals and has to be repaid at some point. Realize that money borrowed is actually cannibalizing future earnings, and because debt has to be repaid WITH interest, it cannibalizes future spending in a disproportionable amount. In simple terms, borrow a thousand bucks in 2025, and it reduces your spending by more than a thousand bucks due to the interest and the higher cost of goods due to inflation. Some theories suggest the mall spending, besides being debt driven by credit, it is also fueled by government subsidy payments. Although a combination of fancy words, "government subsidy payments" means things like unemployment compensation, food stamp programs, medical care compensation and all the other forms of free programs that are meant to reduce the cost of existence to those on the lower income scale. The programs run the gamut. Adding all those conduits of free money and one might conclude if the government eliminates certain "existence" costs to some, that frees money to be spent on all that stuff packed into those designer bags I see at the malls. Now before getting your Calvin Klein's in a wad over the wording of the last paragraph, monetary facts have no room for judgment. The fact is if you relieve someone of the cost of one thing, if they have money, they may spend that money on another "thing." And it's possible those other "things" they spend it on may be those tempting, pretty things at the super mall. Hey, I'm just saying. In conclusion, the theory of Occam's Razor subscribes to the belief that the conclusion that is the most obvious conclusion usually is the right conclusion. That said, it simply might be all those custom shopping bags are being filled with debt-laced money. Keep in mind, whatever the source, more spending adds to more inflation. And if those shopping bags are indeed being filled with debt-laced spending, all that debt has to be paid back at some point. And that, inevitably, will lead to even more debt. And round and round we go. And that means, eventually, all those mall parking lots might not be so full as they are today. But with the banks more than willing to hand out more cards, it still might be a long way off. Oh joy, let's all go to the mall. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a BA in Economics with honors, 1979, and California Insurance License #0L34249. His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com