The High Price of Easy Credit
This piece by jan-martin feddersen has a hilarious spoof advertisement. But don't fail to read the text. It shows that credit creation at very high rates is out of control in the USA today. (Thanks to Merryn Somerset Webb for the link in her newsletter). I remember the chairman of Lloyds Bank saying that the personal sector should not acess credit - funds loaned to his bank by depositors should all go to the firms sector of the economy. Now it seems that the USA needs between $7 and $8 of debt to create $1 of additional GDP. Undoubtedly easy credit has been the engine of asset price inflation.
