i guess consuemr credit stems from bank deposits and what the federal reserve buys from banks in order to manipulate interest rates???
ie "Firstly, t_he Fed pushes new reserves into the system via the OMOs_ in order to try to bring the FFR down. Secondly the 'commercial banks pyramid loans on the basis of those reserves.’ So normally if the Fed increases the monetary base (not typically notes and coins but more commonly by increasing the total quantity of reserves in the system held on account with the Fed itself) by 100 billion you might expect an actual expansion of the overall money supply of maybe 1 trillion (in a very simple example)." found here the actual procedure of creating money (alt thread) "
i dont know if the above is true or not…it is what i was told but i cant confirm it.
www.economagic.com show total consumer credit (is this a real measure or an incomplete one?) increase from 1.7 trillion in 2001 to about 2.5 trillion in late 2008. a little over a 100 billion per year increase.
economagic shows m2 rising from 5 trillion to about 8 trillion over the same time period.
by comparison total consumer credit from 1994 to 2001 went from 900 billion to 1.8 trillion…a little faster pace than 2001 to 2008.
m2 went from 3.5 trillion to about 5.3 trillion
if the increase rate for consumer credit and m2 were similar between 1994 to 2001 and 2001 to 2008 why was there a banking meltdown in 2008? i dont recall the same happening from 1994 to 2001 unless some consider the notion of the tech bubble to be true.
if actions are an indication of motivation and if the above is true, it appears that the federal reserves motivation is to keep itself going no matter what bubbles or economic mishaps occur as a result of its money creation. but i cant confirm the above info.