John and I connected to discuss the latest economic developments. His
next book, co-written with Goldmoney's James Turk will be released any
day. John believes that bank lending is about to pick up big time. The
reason is simple. Since at least the 1980s, US policy has been to
convince us to borrow as much as possible on pretty much anything we
could think of. This worked brilliantly until 2008, when homeowners,
consumers and businesses hit a wall and private sector defaults began to
exceed new loans. Another Great Depression was imminent.
But
instead of allowing this natural cleansing process to run its course,
governments around the world stepped into the breach themselves,
borrowing tens of trillions of dollars to replace evaporating private
sector debt. The idea, to the extent that there was one, was to buy time
for traumatized consumers and businesses to relax a bit and start
borrowing again. So sit back and watch the fun begin again.
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