Total credit money creation, aka total credit market debt outstanding (TCMDO), has stalled since 2007.
Doubling time for TCMDO has averaged 8.25 years between 1949 and 2007. The longest doubling times were 11.5 years from 1949 to 1961 and 10 years from 1989 to 1999. The shortest two episodes were each six years long: from 1977 to 1983, and from 1983 to 1989.
Real GDP over the longest periods increased 56% and 36% respectively. Over the shortest periods it increased 14% and 28% respectively.
Since 2007 TCMDO is expanding at a crawl, comparatively speaking, up at just 12% for the five years ended in July 2012. Real GDP for the period is a pathetic 3%.
At the current snail's pace, $1165 billion per year for the last five years, it will take until the year 2050 for TCMDO to double again.
Current quantitative easing programs continued indefinitely at the current rate of $1020 billion per year are as unlikely as previous iterations to lead to the expansion of TCMDO. The transfer mechanism is broken because the credit money creators, the banks, now prefer the option of investing elsewhere, which they did not have before 1999. The only way to fix that is to overturn Gramm-Leach-Bliley, and to reform mortgage lending.
Credit money, the lifeblood of the nation, is not even reaching the veins, let alone flowing through them at a rate sufficient to generate any GDP heat.
