David Rosenberg writes that the government is currently doing, “all it can to keep the credit taps open,” but isn’t it possible that demand for credit is an even bigger problem than supply? He continues, “Bank lending to households and businesses has contracted more than 7% from a year ago, an unheard-of rate of decline unless you want to go back to Japan in the 90s or the U.S.A. in the 30s.” Demand for credit was precisely the problem in these prior examples. You can open the credit spigot wide but without borrowers you’re missing some key plumbing.

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