A tortuous read of 81 pages. It does however study and address an extremely critical component of the current credit and real estate crises and why these events are inherently deflationary. As noted below private label credit (shadow banking) originated 20 Trillion in credit compared to the traditional banking system that originated just 11 Trillion. Private label credit creation has fallen 90 odd percent. This is why there is no inflation, hyper or otherwise. Credit has collapsed, while the Fed has indeed printed gargantuan sums of money and flooded the market with it, the Fed’s pumping is less than the total of money and credit that was previously available. Because if your going to state that Fed monetary pumping leads to inflation you need to include credit in the calculation or the statement is essentially meaningless. Did Zimbabwe or the Wiemar Republic use credit extensively… no they didn’t, which is why government money printing did lead to hyperinflation as money was the ONLY means of exchange
Excerpts below:
Our monograph “Shadow Banking” documents the origins, evolution and economic role of the shadow banking system. Its aim is to aid regulators and policymakers globally to reform, regulate and supervise the process of securitized credit intermediation in a market-based financial system.
At the eve of the financial crisis, the volume of credit intermediated by the shadow banking system was close to $20 trillion, or nearly twice as large as the volume of credit intermediated by the traditional banking system at roughly $11 trillion.
Some segments of the shadow banking system have emerged through various channels of arbitrage with limited economic value …
The whole report can be found below.
Federal Reserve Bank of New York
Staff Report 458
Zoltan Pozsar
Tobias Adrian
Adam Ashcraft
Hayley Boesky
July 2010
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
