zerohedge.com / by Tyler Durden on 12/27/2015 11:31
One of the biggest quandaries of this cycle for the US economy has been the amount and growth of commercial bank loans. Virtually non-existent for the first three years of the centrally-planned new normal, something changed in 2012 at which point US bank loans, led by Commercial and Industrial or C&I lending growing at a double-digit pop, started to rise at an impressive pace, asking many to wonder: maybe the biggest driver for a sustainable economic recovery is in fact present, because where there is loan demand, there is velocity of money.
A few years later, as the loan growth persisted with virtually no flow through to GDP growth, we – and others – wondered: we know there is a “source of funds”, but what about the “use of funds” – how can banks be creating tens of billions in loans if virtually nothing was ending up in the broader economy?
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