When credit is too much of a good thing


By Edward Hadas – What does credit do after it has finished the job it was designed for?

The supply of credit ought to stop at funding productive activity.

But the reality is different. Surplus credit fuels dangerous asset price inflation and funds profligate governments.

Credit too easily goes astray and there is no natural force to rein it in. Without firm regulatory guidance, credit seems to expand indefinitely, until the financial system explodes. That has been the pattern since the end of the Second World War. more> http://tinyurl.com/pyl26kh

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