Chart of the Week 07 August 2015
Excessive credit build-up is followed by a credit purge as bad debt is eliminated and repayable debts are reduced. These actions present a serious drag on economic activity and can persist for many years, even a decade or more. If credit is the mother’s milk of capitalism, then deleveraging can create nutritional problems and deflation becomes a significant risk.
The deleveraging credit purge cycle is discussed in video after the Read more >> jump.