In a credit-addicted economy, you don't need credit to actually fall for there to be problems. All you need is a slowdown in the growth rate, and you get big problems. Now, the government and the Fed are aware of this, so they are creating debt through fiscal deficits and monetization. That creates a hugely volatile environment.
In 2008, government credit creation was inferior to private credit contraction, and asset markets tanked. In 2009, government credit creation was higher than private contraction, and asset markets went ballistic. Lately, government credit creation has slowed, and asset markets have gone down. Now, the Fed is aware of this, and it's only a matter of time before it throws more money into the system. I guarantee this.
in fool.com
Related: Bank of America Corporation (Public, NYSE:BAC), Citigroup Inc. (Public, NYSE:C), JPMorgan Chase & Co. (Public, NYSE:JPM), Wells Fargo & Company (Public, NYSE:WFC)
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
