Commercial and Industrial Loans, All Commercial Banks

Profits Rising, Credit Failing = CRASH!

The Private Sector Isn’t Leveraging for Growth — So Why Are You Buying?

This chart cuts straight to the engine of the bull run in the stock market.

The blue line represents commercial and industrial loans relative to the money supply — a proxy for productive private-sector credit creation.

When it rises, businesses borrow to expand.
When it falls, they don’t.

Right now, "They Don't" it’s falling.

What history shows

A rollover in business credit efficiency precedes every recession:

Not GDP.
Not jobs.
Not inflation.

Credit moves first.

The structural issue

Each recovery now requires:
More money
More leverage

For less productive growth

That’s the law of diminishing returns to credit — and the long-term trend is down.

Why 2020 didn’t fix this

The post-COVID spike was emergency borrowing, not expansion. Once it passed, credit efficiency collapsed to new lows and never recovered.

That’s the tell:

The private sector isn’t willing to leverage for growth.
Why policy can’t save it

The Fed can cut rates and add reserves.
It can’t create profitable opportunities.

When ROI falls, borrowing stops — regardless of policy.

Bottom line

Expansions don’t end when rates rise.
They end when businesses stop borrowing productively.

If the private sector won’t leverage for growth,
Ask yourself what you’re buying.

#FAFO GTFO & STFO!

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