Did the Economy Just Stumble Off a Cliff?-08.24.17


  • The signs are everywhere for those willing to look: something has changed beneath the surface of complacent faith in permanent growth.
  • This is more intuitive than quantitative, but my gut feeling is that the economy just stumbled off a cliff. Neither the cliff edge nor the fatal misstep are visible yet; both remain in the shadows of the intangible foundation of the economy: trust, animal spirits, faith in authorities’ management, etc.
  • Since credit expansion is the lifeblood of the global economy, let’s look at credit expansion. Courtesy of Market Daily Briefing, here is a chart of total credit in the U.S. and a chart of the percentage increase of credit.
  • Notice the difference between credit expansion in 1990 – 2008 and the expansion of 2009 –

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Source: charleshughsmith.blogspot.com/