The Credit Cycle Is Self Correcting

The longer i'm involved in investing, the more impressed i am by the power of the credit cycle. It takes only a small fluctuation in the economy to produce a large fluctuation in the availability of credt with great impact on asset prices and back on the economy itself. Prosperity brings expanded lending, which leads to unwise lending, which produces large losses, which makes lenders stop lending, which ends prosper arity, and on and on. Frequently aid and abet financial bubbles.