“Credit leverages income.  Lowering interest rates increases leverage. We are now at the end-game of these two expansions of leverage: incomes are no longer rising, and interest rates have been cut to near-zero when adjusted for inflation (a.k.a. loss of purchasing power).  Relying on credit to fuel ‘growth’ in everything only worked when incomes were rising and interest rates could be cut. Now that incomes are stagnant for 90% of the populace and interest rates have been slashed, there is no way to increase leverage.”

http://charleshughsmith.blogspot.com/2012/08/the-fantasy-of-debt-no-trade-offs-no.html

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