This chart of total US credit instruments, courtesy of the Fed, offers some useful perspective on the toxic leverage now sickening the US economy. Similar trends have compounded through most of the world’s economies over the past 14 years.
It took 50 years (1951 to 2001) for credit levels to increase 30 trillion, and just the past 13 of fiscal and monetary largesse to double that. The inevitable write-off and pay down phase still lies before us.
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