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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Les H who wrote (194224)3/31/2009 10:27:51 AM
From: Les HRead Replies (1) of 306849
 
Deflationists say low lending offsets that but M4 – the broadest monetary measure, which includes bank lending – is still growing by 16pc a year.

Lending to households is 5pc down on last year. Lending to firms is still expanding but only by 4pc, compared with 15pc average annual corporate credit growth since 2005.

But credit to OFIs – other financial institutions – is now growing at a colossal 45pc annual rate, so banks are "still lending", as they say, but mostly to their own off-balance sheet vehicles which they set up in previous years to take crazy risks.

That lending will find its way into the economy and is still inflationary – even if ordinary punters are "credit crunched".

So, both base and broad money are now expanding rapidly – storing up huge future inflation, despite the slowdown.

telegraph.co.uk
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