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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mthomas who wrote (33945)	6/5/2005 6:53:25 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

The delusion that economic growth is much faster when debt is created faster than income is quite popular, especially today. This mis-perception occurs when the period of time studied is limited to only that period when debt increases, rather than studying the entire period - including the period of stagnation and collapse caused by excessive debt. Your life can seem a lot easier when it is subsidized by running through the available credit on a number of new credit cards. If you exclude the unpleasantness when you have maxed out your credit cards and can't qualify for any more, then increased credit use always make life better. Once this perceptual error is recognized, it becomes clear why the US banking system is greatly deficient the capital required for a stable banking system. An economy heavy in debt and deficient in capital is brittle, unstable, prone to collapse, and less efficient than a properly capitalized economy. .