Credit throughout the US economy is flat-lining or in decline

SHOOT: An economy based on credit can't grow when credit is declining. So where does this talk of 'recovery' come from? Recovery based on what?

clipped from www.ft.com Outstanding consumer credit has been contracting for five months straight, falling $10.3bn from May to June and down 4.9 per cent on an annual basis. Credit throughout the US economy is flat-lining or in decline, as banks tighten their lending standards and over-burdened businesses and households begin to pay down debt accumulated during the boom. There is a danger in the Fed’s monetary myopia. In spite of much discussion about the Fed’s exit strategy, the really tricky part of extricating oneself from extraordinary policies is not the how but the when. Focusing on indicators that are proving slow to respond to its economic massaging increases the chances that the Fed will continue the treatment for too long.