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Paul L. Kasriel: Don’t End the Fed, Mend the Fed
Although the return to a gold standard for our monetary system has much appeal, it is unlikely to occur. So, let’s not let the perfect be the enemy of the good. Perhaps there is second-best monetary...
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Westpac: China credit supply outstrips demand
Phat Dragon is placing the most value on new information regarding credit demand and supply. It is credit growth that tells us more about the shape of activity later this year than any other macro...
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Australia: Housing market weakens
Housing credit growth is at its lowest level in over 30 years: lower than the dip of the early 1980s and the crash of 1987. The current rate of growth is barely sufficient to match already depressed...
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Conversation with Bridgewater Associates’ Ray Dalio | Credit Writedowns
The video below is an in-depth full hour-long segment and well worth watching. Notice that Dalio sees the credit accelerator as a key component adding to aggregate demand and the key component that...
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Taking the leverage out of economic growth | Reuters
Edward Hadas points out that long-term credit growth has exceeded growth in nominal GDP (real GDP plus inflation) in the US and Europe for some time. Not only does this fuel a credit bubble but it...
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Rude Awakening Awaits Western Economies | WSJ
Michael J. Casey at WSJ interviews HSBC group chief economist Stephen King, author of When the Money Runs Out: The End of Western Affluence: Mr. King’s thesis….. is that we in the West are in line for...
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High credit growth prolongs recessions
Research by the Federal Reserve Board of San Francisco shows how high credit growth prior to a financial crisis can prolong the recession by three or more years. The graph below compares the average...
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GOLDMAN: Here’s The Simple Reason We’re Probably Not About To Have Another...
From Joe Weisenthal: Historical analysis of past big busts done by top economist Jan Hatzius and Sven Jari Stehn shows that while there is growing risk of a stock market drop because of the big rally...
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RBA strategy: Fight fire with gasoline
This is just plain wrong. The Australian economy is sitting atop an enormous housing bubble caused by credit expansion from 1995 to 2007. To counter the end of the mining boom, the RBA lowered interest...
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Australia: Housing bubbles and declining business investment
The Australian housing bubble is alive and kicking, with house prices growing at close to 10% per year. Loan approvals are climbing, especially for owner-occupiers. Fueled by record low interest rates....
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