“We have undoubtedly expanded the credit structure, spending today and postponing the accounting until tomorrow. We have been guilty of the sin of inflation. And there will be no condoning the sin nor reduction of the penalty because the inflation is of credit rather than a monetary one..
“..the area covered by credit sales enlarges and the volume of credit expansion increases. As in monetary inflation the immediate results seem favourable. Credit expansion results in business activity, in full employment, in optimistic outlook and in a flood of congratulatory literature proclaiming us wiser than our predecessors. But the evidence is consistent and cumulative. The past decade has witnessed a great volume of credit inflation. Our period of prosperity in part was based on nothing more substantial than debt expansion.”
- Charles E. Persons, excerpt from ‘Credit Expansion, 1920 to 1929, and its lessons’;
Hat-tip to Eric Janszen at iTulip.com.
The chart frenzy continues. Friday 17th’s inaugural MoneyWeek investment seminar provided no shortage of memorable charts, but Merryn’s chart of the history of the UK base rate is a particularly remarkable one..
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