Total U.S. Credit Market Borrowing

Our friends over at The Big Picture brought to our attention these charts from the Global Macro Monitor Blog that illustrate just now dramatic the drop off in private credit market borrowing was back at the start of the credit crunch. Beautiful charts, but this is the part we have some issues with....

"If, as the President says, ‘the flow of credit is the lifeblood of our economy”, the country would have died in 2009 had not the policymakers taken the extraordinary measures they did. These charts illustrate how close we were to the abyss and should give a clearer perspective on what Bernanke & Co. were/are up against. They are heroes, in our book, for stabilizing the situation and pulling us back from the abyss. The jury is still out, however, on long-term structural adjustment and preventing a global sovereign debt crisis."

Heroes? We think not, when you consider that they only acted in a manner that was perfectly predictable. There was no way they were going to just "let the free market work" and stand on the sidelines. That's not what "politicians" do during times of turmoil, they act, even if those actions will have dire consequences down the road. We only have theories and hypothesis about what would have happened had the free market been allowed to work. However we will all get to document the final outcome of the path Mr. Bernake has lead us down. Stay tuned...