{"id":12572,"date":"2015-09-24T05:58:09","date_gmt":"2015-09-24T10:58:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12572"},"modified":"2015-09-24T05:58:09","modified_gmt":"2015-09-24T10:58:09","slug":"us-credit-growth-the-first-cracks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12572","title":{"rendered":"US Credit Growth \u2013 the First Cracks?"},"content":{"rendered":"<h3 class=\"art-postheader\"><a title=\"Permanent Link to US Credit Growth \u2013 the First Cracks?\" href=\"http:\/\/www.acting-man.com\/?p=40261\" rel=\"bookmark\">US Credit Growth \u2013 the First Cracks?<\/a><\/h3>\n<p><strong>Inflationary Bank Lending and Money Supply Growth<\/strong><\/p>\n<p>Given that there is currently no \u201cQE\u201d program underway \u2013 with the exception of the reinvestment scheme designed to prevent the Fed\u2019s balance sheet from shrinking (if it were to shrink, the money supply would decline as well) \u2013 money supply growth depends primarily on the amount of fiduciary media created\u00a0<em>ex nihilo<\/em>\u00a0by commercial banks.<\/p>\n<p>Putting it differently, it depends on the growth in bank lending, since new uncovered deposit money comes into being by the extension of credit by banks. This deposit money is a money substitute that is only partially covered by standard money, or potential standard money (i.e., bank reserves). However, it has to be regarded as part of the money supply, given that it is used for the final payment of goods and services. From the perspective of its users, it is money.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-40270\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2015\/09\/financial-bubble-credit.jpg\" alt=\"financial-bubble-credit\" width=\"640\" height=\"425\" \/><\/p>\n<p>Photo credit:\u00a0<a class=\"owner-name truncate\" title=\"Geh zum Fotostream von .Kai\" href=\"https:\/\/www.flickr.com\/photos\/kkmueller\/\" data-rapid_p=\"61\" data-track=\"attributionNameClick\">.Kai<\/a><\/p>\n<p>Since the crisis of 2008 and the collapse of the mortgage credit bubble, the following trends have been in evidence: lending to corporations has quickly reached growth rates usually associated with boom conditions. Consumer lending has by contrast been more subdued, with mortgage credit growth not surprisingly only very slowly moving back into positive territory. Most of the acceleration in bank lending could be observed once \u201cQE\u201d was tapered and ended \u2013 as a result, broad US money supply growth has remained brisk, even though it is far below its peak levels of recent years.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>US Credit Growth \u2013 the First Cracks? Inflationary Bank Lending and Money Supply Growth Given that there is currently no \u201cQE\u201d program underway \u2013 with the exception of the reinvestment scheme designed to prevent the Fed\u2019s balance sheet from shrinking (if it were to shrink, the money supply would decline as well) \u2013 money supply [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,2230,9226,536,954,9225,6170,3128,661,662,9224,9227],"class_list":["post-12572","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bank-reserves","tag-consumer-lending","tag-money","tag-money-supply","tag-mortgage-credit-bubble","tag-pater-tenebrarum","tag-peak-debt","tag-qe","tag-quantitative-easing","tag-us-credit-growth","tag-us-money-supply-growth"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12572"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12572\/revisions"}],"predecessor-version":[{"id":12573,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12572\/revisions\/12573"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}