US deleveraging ending, outlook upbeat, tapering coming

Today’s commentary
The latest flow of funds data from the US Federal Reserve show that the great American household deleveraging may be over. This should add a credit accelerator to the US economy which maintains growth. Meanwhile analysts are increasingly optimistic about US and global economic fortunes. Data points and analysis follow.
As I delve into this topic, I want to be upfront that I share the optimism about the cyclical upswing in the US and global economy which I will describe. I see the risks as mostly to the upside, in the form of asset bubbles. Nevertheless, I do want to add a word of caution here because I believe that the secular forces of private debt are looming in the background. So we will need to see wage growth during this cyclical upturn for the incipient releverag...


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