As in prior overall credit driven financial manias, consumer credit is surely an important prop in driving asset prices. Additionally, the credit-manic masses having simply turned a blind eye to the Fed's feeble interest rate foibles is further definitive characterization of the bubble all around us. Over the past few weeks, we have discussed GSE credit creation, margin debt, growth in M3, etc. Growth in consumer credit simply joins the Liquidity Big Boys club in terms of its overall contribution to asset price inflation. Think about it.
Consumer credit is really only a phenomenon of the last four decades or so.
It simply wasn't there in 1929. In 1973, it was still in its infancy. The baby boomers had not yet come of age, and neither had their consumer credit demands. We often hear that margin debt is just not that big a deal today relative to its GDP equivalent levels in 1929. Consumer debt, mortgage debt, equity lines, collateralized loans against stock holdings, auto lending, etc.