The Credit Structure Of The United States And Its Vulnerabilities

It is not possible to understand an economy without understanding how that economy is financed. In the latest Macro Watch video, we examine the credit structure of the United States and we explore its vulnerabilities.

We see who has lent the $66 trillion that has been borrowed in the United States. We also consider the origins of the money that was lent. Did it come from savings, fiat money creation or credit creation?

We find that savings are becoming increasingly insignificant as a source of financing. Credit Creation provides the funding now.

This change greatly increases the financial system’s sensitivity to interest rates.

Too much monetary tightening by the Fed could cause a systemic financial sector collapse and an economic breakdown.   That means interest rates are likely to remain lower for longer. If they don’t, Creditism will collapse and the global economic bubble it has produced will implode.

Macro Watch subscribers can log in and watch this video now. It is 22 minutes long and contains more than 50 charts.

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