All across the banking world – from commercial loans to leases and real estate – credit is collapsing. Ambrose Evans-Pritchard writing for British newspaper The Telegraph:
Credit strategists are increasingly disturbed by a sudden and rare contraction of U.S. bank lending, fearing a synchronized slowdown in the U.S. and China this year that could catch euphoric markets badly off guard. Data from the U.S. Federal Reserve shows that the $2 trillion market for commercial and industrial loans peaked in December.
The sector has weakened abruptly as lenders tighten credit, especially for non-residential property. Over the last three months it has dropped at a rate of 5.4% on annual basis, a pace of decline not seen since December 2008.
C & I loans, y/y growth. Readers may recall that we recently showed this chart in “Libor Pains”, in which we discussed corporate debt. Actually, y/y commercial & industrial loan growth peaked in early 2015 already, not just “last December”… but lettuce not quibble (Pritchard likely meant to refer to total commercial bank credit, the growth rate of which reached an interim peak in late 2016 – shown further below). The point remains that credit growth is falling fast – click to enlarge.
If new loans aren’t made, the supply of credit money will contract. That’s the “doomsday device” embedded in our credit money system: It is subject to sharp and disastrous drawdowns in the money supply.
When loans are paid or written off, the outstanding credit (money) ceases to exist. This reduces the money supply and triggers corrections, recessions, or market crashes.
Real money doesn’t disappear in a credit contraction. But our fake “credit money” does. This makes the entire system vulnerable to the credit cycle. Credit increases. Then it decreases. And as credit money vanishes, the recession deepens… causing the credit market to tighten further and causing more money to disappear.
…click on the above link to read the rest of the article…
See, if you want to whip inflation now, you don’t need to do any of the really difficult things, such as printing less money… or God forbid, return to honest, market-chosen money (shudder!). All you need is intelligent nutrition! Image credit: Marshall Astor
The fellows depicted above certainly mesh perfectly with the image of meth-addled cannibals conjured by our imagination… A few interesting questions regarding this event remain unanswered to this day. Did they marinate their meal? Fill it with stuffing? What were their wine and salad choices? Was their dinner roasted on a spit, cooked in a jungle wok the traditional way, or were these pale gourmets connoisseurs of wino tartare?
The assassin and his victim, Andrei Karlov, Russia’s ambassador to Turkey. While making the Travolta-like dance move caught in the photograph above, the assassin shouted “Allahu-akbar! Don’t forget Syria! Don’t forget Aleppo!”. Not a “moderate” rebel we would guess, but rather a sympathizer of assorted head-choppers. The assassination was photographed by several people and most of the pictures look like stills from a Hollywood movie. This gives the incident quite a surreal quality. It is as if it was staged specifically for the the evening news. No unfocused shaky-cam stuff forcing you to squint if you want to see something – these days, we get our daily snuff in high definition! Obviously, modern audiences demand and deserve certain quality standards.
Famous French hippie and author Voltaire. He wears the same sardonic grin in every painting, whether he’s depicted at a young or an old age, doesn’t matter. His real name was François-Marie Arouet; he adopted the pen name Voltaire (one of 178 different ones he used) after spending 11 months incarcerated in a windowless cell in the Bastille, following the publication of a satirical verse in which he insinuated that the French regent practiced incest with his own daughter. Said regent was the infamous Duc d’Orleans, who shortly thereafter conspired with John Law to utterly ruin the country’s currency and economy in an early central banking experiment. Voltaire’s decision to insult him in advance reveals his excellent foresight and character judgment. The aristocracy was never sure whether it should fear Voltaire for his anti-authoritarian streak, or love him for his wit.
Etatiste tool Kenneth Rogoff, whose authoritarian jeremiads against cash currency we have first discussed and criticized in 2014 in “
Two low interest rate persons! The Trumpsumptive president (Donald the Tremendous) can be seen here indicating the approximate size of the interest rate that will still keep us out of “major problems”.
No wonder the Dragon and his partners in crime flooded the EU banking system with “money” this past week…
Only two? There were four last time!
Antiquity’s most famous patent troll Archimedes shortly after his famous epiphany in the bathtub
Groucho dispensing valuable advice Photo via imdb.com
Excavation of the “Giant of Cardiff” – but there are even more giant, more amusing and more far-reaching frauds on offer these days… Photo via paranormicstv.com
Not only did they avoid another Great Depression by bold absurdity…giving the economy more of the one thing of which it clearly had too much – debt. They also carefully monitored the economy’s progress so as to avoid any backsliding into normalcy.
The gap between economic output and the debt accumulated to achieve it continues to widen…while savers are expropriated and capitalists are given an incentive to consume their capital (the “euthanasia of the rentier” propagated by Keynes has finally been achieved) – click to enlarge.
