Loan issuance in the U.S. contracted by 55% in 2008 compared to 2007. Is it not enough?
Reference

Being curious I looked for the data at the European Central Banking:

Compare all of Europe average outstanding loans on commercial bank balance sheets
http://sdw.ecb.europa.eu/browseChart.do?DATASET=0&DATA_TYPE=1&node=2116079&FREQ=M&BS_ITEM=A20&REF_AREA=308&SERIES_KEY=117.BSI.M.U2.N.A.A20.A.1.U2.2210.Z01.E
with just Belgium and Germany for instance:
http://sdw.ecb.europa.eu/browseChart.do?DATASET=0&DATA_TYPE=1&node=2116079&FREQ=M&BS_ITEM=A20&REF_AREA=*MU&SERIES_KEY=117.BSI.M.BE.N.A.A20.A.1.U2.2210.Z01.E&SERIES_KEY=117.BSI.M.DE.N.A.A20.A.1.U2.2210.Z01.EZ01.E
Now compare it with the UK !
http://sdw.ecb.europa.eu/browseChart.do?DATASET=0&DATA_TYPE=1&node=2116079&REF_AREA=*OM&SERIES_KEY=117.BSI.M.GB.N.A.A20.A.1.U6.2210.Z01.E

Guys, I would expect in an Austrian forum for people to drill down into the numbers. These numbers don’t tell the whole story.

This ** is ** a credit contraction. If you’ve been watching, credit extinguishment is greater than credit creation. The government has propped up the ** firms ** but the credit machine is going in reverse.

Evidence? Look at at reserves. Usually M2 is 60 x reserves. Well, reserves are galloping, but very little new credit is being extended to replace the old credit being lost.

These numbers just don’t tell the story.

The problem is and has always been that several stupid insurance companies issued Credit Default Swaps and faced bankruptcy as they could not pay these off. Of course the holders of these policies were: Goldman Sachs, JP Morgon, Citibank; simply a bunch of Federal Reserve Member banks.

Of course, I agree regarding the fed’s largesse ending up as socialized losses on the populous.
Again, THAT is the problem – that the private fed has the cartelerie license to issue those $USD debts.

You see the fed as part of the government and their balance-sheet doubling as an act of typical bureaucratic tomfoolery.
I see it as the opposite.
A private banking cartel mortgaging Americ’a future with wanton disregard for the effects on the American people, and, yes, the purchasing power of their money.

After discussing the TOTBKCR chart, the author states:
” that work has now placed US taxpayers on the hook for trillions of dollars of additional Treasury commitments…”.

My major point was that everything in the TOTBKCR chart has nothing to do with the Treasury, with the exception, again, that US taxpayers are ‘on-the-hook” for all $USD-denominated debts.

Regarding the link on the discussion of the Money Masters – forgive me, but I followed Conrad’s roller-coaster dilemma fed by confusing and contradictory explanations of what money is, what ‘securities’ are, who creates what first, and who benefits, and how, and why.

If he ever came to any conclusion, I didn’t see it.

Perhaps the Mises community believe this dialogue is sufficiently behind them, or perhaps not worth the time, but I see it directly in their path.

The message of the AMI and the MoneyMasters is that the Rothchild’s have ever been correct:
“Permit me to create and control the nation’s money and I care not who makes its laws.”

Or which economics textbooks are taught at the business schools.
Respectfully.

as long as the lifeline of the fed is offered to commercial banks, their (paper) losses will continue to be socialized.

http://www.loanpricing.com/newsroom_files/press_release_4Q08.htm

“Loan issuance in the U.S. for 2008 came in at only $763.98 billion, which is down 55% from 2007.” Thomson Reuters LPC

Separately, the graph displays a “recovery” (resumption of prior trend) that could well have been instigated either by government responses or expectations based on government responses. The article makes no note of this likelihood.

This is not to say that the government responses aren’t (as noted in the article) outrageously larcenous and destructive, nor even that the prior trends themselves may not be similarly characterized.

I’m not sure I get your point.
Did you get mine?

The “total bank credit outstanding” graph represents the balances of the ‘commercial banks’, which are, by definition, private banking members of the federal reserve system. That is to say, these balances are only related to becoming obligations to the taxpayer by virtue of their (debt/credit) balances being denominated in US dollars – the sole source for repayment of those balances therefore being US citizenry.

They are NOT, as the article on the ‘crunch’ implied, obligations of the Treasury.
As I pointed out, the Treasury’s obligations, whether borrowed from the private federal reserve bankers, or elsewhere, over the period have certainly grown as a result of lunatic government policies resulting in unprecedented Federal deficits, but they are not represented in this chart.

The problem in ALL of this, were we to begin to address it, is the debt-money system, aka fractional reserve banking.
If we want to solve this problem, it’s back to Friedman’s 100 percent reserve and Treasury-issue.
Google, and watch, The Money Masters.
Respectfully.

But, do we really want that? We were handing out home loans to anyone, and surprise! it ends up that not everyone can afford a mortgage, despite the blatant lie that my bank told me. (“If you can afford rent, you can afford a mortgage.” – the problem is that being able to “afford” something is as much about risk as it is about a dollar figure, and homeownership is far more risky than renting, as it is harder to get out of. And the really funny thing – the bank was pushing me to buy a house in the middle of the so-called “credit crunch”.)

But, it’s clear: the credit crunch served its purpose. The financial system is more nationalized now than it was 6 months ago, and many of the financial higher-ups saved themselves from being tarred and feathered by their stockholders.

I have a question.

What does the “commercial credit” number represent? Is it the assets available to be loaned out? And if so, how does that availability indicate the absence of a credit crunch? Human action is required for a loan to be consummated beginning with a consumer applying for and a banker agreeing to make the loan. The lack of either results in no loan being issued. Therefore, cannot a credit crunch exist by bankers raising their lending standards? By basically refusing to make loans except for extremely credit worthy customers?

Or is your point simply that the money is available and that the government is suggesting there’s no money to lend. That seems ludicrous in light of the billions given to the financial industry.

My own opinion is all this liquidity injection by the Fed and Treasury is “pushing on a string”. The fact is there’s no one to loan to because there is little demand.

Thank you for the article.

http://www.federalreserve.gov/

nb: it’s not .com, and the “private” is more like “opaque” than in the economic sense of the word.

You conflate the total commercial bank credit outstanding figure with being a commitment by the Treasury that is obligating US taxpayers.
I think it is rather the private federal reserve bankers that are responsible for the growth in commercial bank ‘credit’.
The Treasury’s obligations on the taxpayer are of a much smaller magnitude during this period.

As you say, being US dollar denominated obligations, this federal reserve private banking largesse leaves a huge potential obligation to the taxpayers.

This leaves me wondering why the present criticism of the wanton destruction of the American economy by the private bankers of the federal reserve is rather subdued.
Something about pulling some kind of hoax.
Again, the eye of the beholder.
Perhaps we need to await those future consequences that you point out are coming.

“The rate at which we are stealing the value of your savings has fallen dramatically. This is a crisis for two reasons: First, we (bankers and gov) can now transfer less of the purchasing power of your savings to ourselves, obviously a crisis; second, the gullible whom we have ’til now managed to shear unnoticed will be dramatically affected by our actions, which will increase our need and expense for propaganda – I mean, reporting – to quiet the sheep back down and get back to the business of shearing and … ehm … butchery.”

The reason we have trade deficits is because of monetary policy, i.e. printing money. If we didn’t print money, exports would have to equal or exceed imports. How else would we pay for the imports?