Did the economy just stumble off a cliff?

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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 – 2017. Credit expanded by a monumental $40+ trillion in 1990 – 2008 without any monetary easing (QE) or zero-interest rate policy (ZIRP). The expansion of 2009 – 2017 required 8 long years of massive monetary/fiscal stimulus and ZIRP.

This chart of credit change (%) reveal just how lackluster the current expansion of credit has been, despite unprecedented trillions of stimulus pumped into the financial sector.
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Via Charles Hugh Smith


Featured Image: frankieleon/Flickr
The Shepard Ambellas Show is an all original fast-paced comedy, variety, news show where nearly everything goes. Shepard Ambellas is the founder and editor-in-chief of the popular independent news website Intellihub.com (news and politics). Bethany Adoni sits shotgun. The Shepard Ambellas Show airs LIVE weekdays (Mon-Fri) on the Shepard Ambellas YouTube channel from 5-7 pm Eastern/4C/2P. (CLICK HERE TO SUBSCRIBE) Turn notifications on immediately. The show is nationally syndicated on iHeart Radio. An archived version of the show is also available on Apple Podcasts, Spotify, Google Podcasts, Castbox, Deezer, Podcast Addict, Podchaser, JioSaavn, and Spreaker for you listening pleasure.
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