The crisis of 2008 was marked by low access to credit for companies and individuals. The reduction in credit was led by losses on the real estate loans made by banks, which closed their doors on the best of businesses and individuals. Credit/loans are the lifeblood of the economy and facilitate commerce by letting businesses take out loans for the production of goods and services. A reduction in credit disrupts the continuum needed to preserve the flow of economic activity. As a result, businesses reduced production and laid off millions of employees. The stock market fell from September 2007 until March 2009. Since March, the market has risen more than 50% and still rising. However, the increase in stock prices has not reflected upon an increase in credit. The total credit in the country continues to fall, and until the trend reverses, the economy will continue to recede.

Even though credit is not a leading indicator of the future economic prospects, it provides a clear view of the near term opportunities for growth. Many economic watchers mistakenly attribute importance to the total money supply, as a forerunner of consumption and prices. However, most consumption is a function of the total income generated or consumer credit issued. The only way to offset the decline in consumption is through massive deficit spending. A massive deficit of $1.4 trillion has somewhat been able to prevent falling prices, but has been unable to motivate the lenders to increase lending. Unless the lending can increase in the economy, the production and employment will continue to fall, thus lengthening the crisis.  Until the Credit loosens up were looking at a somewhat stagnant and or really slow recovery.

Kevin J. Lawson