COLUMN-Great U.S debt engine slips into reverse: John Kemp

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COLUMN-Great U.S debt engine slips into reverse: John Kemp

By John Kemp LONDON, Dec 12 (Reuters) - After six decades of uninterrupted credit creation and an unprecedented era of consumption and prosperity, the credit process has come to an abrupt halt. If credit has been the locomotive of the modern economy, the third quarter of 2008 marked the point when the engine stalled and the economy began to roll back down the hill. For decades, financial activities have grown much faster than the real economy. Between 1952 and 2007, U.S. nominal GDP grew by a factor of 39 times, while total credit market debt outstanding surged 101 times. Finance has become even more dominant in the last 25 years, as subdued business cycles, improvements in technology... Full Story

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Submitted Dec 12, 2008 9:14am

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Dec 13, 2008 2:02am

M.A.C.Doug

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Brilliant! the much anticipated collapse of the dollar, although seemingly logical, was too simple for my comfort. Thankyou for your analysis and viewpoint.