jmg86............thank you for your explanation, just what I was asking for.
However one aspect not mentioned is the role of the public. The govt/RBA certainly wanted private borrowings to be maintained or increased in the form of dropping rates to 50 year lows and doubling the amount of stimulus to FHB's.
In summary, coerce the average Joe to maintain the status quo or the house of cards collapses. So the govt stepped in, with the help of the public. And now the hangover is in full swing.
So what happens now that the kitty is empty (deficit)?
Finally......the effects of stagnating, or falling debt levels (or as banks say, 'subdued credit growth!) as we are seeing now, has yet to be addressed by a bull.
Which in turn has lead to falling asset prices and the worst retail conditions for half a century. This is fact, not fiction and was theorised by Keen.
