503-785-3485
bill@conerlyconsulting.com
  • Facebook
  • Twitter
  • Linkedin
Conerly Consulting Conerly Consulting
  • Consulting
    • Approach/Philosophy
    • Sounding Board
    • Economics and Business Strategy
    • Assessment
    • Case Studies
    • Testimonials
  • Speaking
    • The Package
    • Topics
    • Testimonials
  • Writing
    • Businomics Newsletter
    • Businomics
    • The Flexible Stance
    • Blog
  • Industries
    • Banking/Finance
    • Manufacturing
    • Other Industries
  • Video
    • Speaking
    • Event Promotion
    • Business Planning
  • About
    • News Coverage
  • Contact
  • Consulting
    • Approach/Philosophy
    • Sounding Board
    • Economics and Business Strategy
    • Assessment
    • Case Studies
    • Testimonials
  • Speaking
    • The Package
    • Topics
    • Testimonials
  • Writing
    • Businomics Newsletter
    • Businomics
    • The Flexible Stance
    • Blog
  • Industries
    • Banking/Finance
    • Manufacturing
    • Other Industries
  • Video
    • Speaking
    • Event Promotion
    • Business Planning
  • About
    • News Coverage
  • Contact
  • Home
  • Economy
  • How Important Is Credit to the Economy?

Economy

03 Dec 2007

How Important Is Credit to the Economy?

  • By Bill Conerly
  • In Economy

Fears of the subprime mortgage crisis spreading into other credit markets prompt the question of whether our economy could operate without the volume of credit that we’re used to.

Our economy could be healthy with much less credit than is
common now. Businesses could operate
with greater equity and retain more earnings. Consumers could defer spending until they had saved enough money for
their purchases. It could work.  There would be a loss of efficiency, but not a total breakdown of the economy.

However, a sudden transition from our present,
credit-heavy economy into a credit-light economy would be disastrous. Many companies have business models based on
financing receivables, inventory and capital spending. They could adapt over time, but not
suddenly. On the consumer side, today’s
buyers use credit. If tomorrow’s
would-be buyers need to save for first, then in the meantime no big-ticket consumer
purchases are made.

This fear of credit markets tightening outside of housing is
the reason that economists are increasingly fearful of a recession. I share that fear, but as a fear, not a
forecast. At this point, there are few,
if any, credit worthy businesses or consumers unable to get the non-real estate
financing that they want. On the
business side, lenders are very happy to make commercial and industrial
loans. In fact, such loans help banks
to diversify away from real estate. Consumers, too, are finding non-housing credit fairly easy to get. The volume of automobile sales on credit
demonstrates that we have not had a general crackdown on credit availability.

Here’s how to be alert to the possibility of a credit-driven recession:  watch for stories about credit worthy businesses and consumers not able to get the non-real estate credit that they would have had access to a year ago.  If you start hearing many such stories, then batten down the hatches; a recession is coming.

  • Share:
Bill Conerly

Search

Sign Up For Our Newsletter!

View Latest Issue

RSS Bill’s Forbes Articles

  • Trade Shows Will Regain Importance After The Covid-19 Pandemic March 1, 2021
    The benefits of exhibiting will help trade shows and conventions to resume, though with some changes.

Testimonials

Bill did a great job. We look forward to a continuing relationship.
John Hamburger, Franchise Times
Bill Conerly has been an invaluable resource to our executive team and ownership by delivering superior, well-founded ideas that are critical to navigating the current economic climate within the construction industry. Bill assisted O.B. Williams Company with developing a strong business plan that we implemented 18 months ago. As a result and together with Bill, we are improving our position within our highly competitive market segment. We understand that navigating this current economy is indee…
David Wick, CEO, O.B. Williams Company
Bill Conerly is one of the most interesting and engaging speakers I have ever heard. The fact that he is a very funny man is a bonus.
James A. Kronenberg, Oregon Medical Association
Your presentation was right on the mark. I received more positive comments about you than any other presenter. We would not hesitate to recommend you to others or have you back for an encore performance.
Bob Russell, Oregon Trucking Association
Thank you for a wonderful presentation. Everyone who heard your presentation was impressed with your analysis, and strong command of facts and theory. More importantly, your ability to weave together substance with humor, in a very dynamic way, meant our attendees learned and retained more information than we would have typically expected. You made economics fun and you left our members with powerful insights on trends and issues to consider as they prepare for the future.
John Aguirre, Oregon Association of Nurseries
Bill was a great resource in helping us develop our business model and has continued to be a great advisor as we have refined it and successfully entered the marketplace.
John Courtney, CEO, NextJob, Inc.
You made a complicated global picture understandable. I have received many favorable comments from those in attendance. I frequently heard comments like ‘Now I understand’ or ‘Wow, now I get it’ and ‘He was great to listen to. Thanks for bringing Bill to our meeting.’
Pete Van Sickle, Idaho Department of Lands
Your talk and its message stuck with people.
David Crowell, after presentation to National Rural Electrical Cooperative Association
Dr. Conerly’s presentation and view of the economic conditions impacting the world of business is insightful and thought-provoking. His analysis and presentation style is audience focused and engaging, leading to the efficient development of follow-up activities by those in attendance.
Paul Ulrich, The Inteplast Group (plastic bags)
The ratings you received from our banker evaluations were among the highest I’ve seen, which matched my impressions exactly. Your presentation style is quite engaging, you bring interesting and valuable content, and our ability to interact in a stimulating way during “Q&A” sessions makes you a valuable addition to any meeting agenda. As a bonus, you are a genuinely enjoyable participant in conference activities beyond your presentation.
Steve Yeakel, Montana Independent Bankers

Get in touch

(503) 785-3485

bill@conerlyconsulting.com

PO Box 2188
Lake Oswego, OR 97035

Useful Links

  • Consulting
  • Speaking
  • Videos
  • Blog
  • Press
  • Contact

Social Links

  • Facebook
  • Twitter
  • Linkedin

Newsletters

Copyright 2020 Conerly Consulting LLC