Consumer credit has been on a tear as shown by the Credit Report...

Consumer credit has been on a tear as shown by the Credit Report released by the Fed on October 5.Consumer credit increased at an annual rate of 6 percent in August. Revolving credit increased at an annual rate of 8 percent, and nonrevolving credit increased at an annual rate of 4-3/4 percent. Consumer Credit 1970 to 2007(click on chart for a crisper image)This chart shows how weak the deflation threat actually was in 2001 when the Greenspan Fed went on a slash and burn campaign cutting interest rates to 1% and fueling the biggest housing bubble and credit bubble in the history of the world. Consumer Credit 1970 to 2007Percentage Change vs. One Year Ago(click on chart for a crisper image)In five out of the last six recessions consumer credit took a nose dive on a percentage wise basis as compared to the prior year. Looking at the first chart it seems everything is rosy. Even the second chart shows we are a long way from the zero line. However, changes in consumer credit can be sudden, deep, and without much warning. The housing recession has now spilled over in to a trucking slowdown and Wal-Mart is slashing prices on toys in an attempt to increase sales. Both of those topics were discussed in Ryder Blames 'Freight Recession' on Housing Spillover.