Credit's getting harder to come by

One million people in the UK used credit cards to pay their rent or mortgage in the past year. And they'll be the first to feel the pinch as the credit contraction tightens.

The reason that most people do not understand the seriousness of this credit contraction is because they have no up close experience of a credit expansion and what it entails. Only by understanding the nature of the credit expansion can you properly understand how serious the subsequent contraction is for both the economy and investments generally.

Fortunately, the writer has up close personal experience of credit expansions in the past, the most recent of which ended in the early 1990s. Characteristics remain the same, except that this most recent one was the grand daddy of them all. We expect the contraction to be similarly spectacular.

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