Tighter credit and lower consumer borrowing are not the only drivers of economic restructuring.
As interest rates rise, partly in an effort to slow consumer borrowing, insolvencies are likely to climb further.
Oklahoma never had a big run-up in housing prices or consumer borrowing, so it did not have far to fall.
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Net consumer borrowing relative to personal disposable income has fallen 4% in the year through March, the second-largest drop in 55 years.
There were plenty of signs of overheating, such as rampant consumer borrowing, that he could have used to justify higher interest rates.
In the past, a rapid rise in consumer borrowing and spending would cause a central bank to push up interest rates to curb inflation.
Mortgage lending is still profitable, yet in June it was 3% lower than a year earlier, while net consumer borrowing fell for a second month.
Traditionally, during recessionary periods, the Fed lowers rates, which encourages consumer borrowing and the increased levels of spending help drive the economy to stronger growth levels.
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Another might be worries that America's rebound is unsustainable, being based on a seemingly reckless fiscal policy, unusually low interest rates, and a consumer borrowing binge.
Even if house prices merely flatten off rather than fall, consumer borrowing and spending could slow sharply as people feel constrained to put more money aside.
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But rates were frozen for the second consecutive month at 4.75% almost a fortnight ago, having climbed from 3.5% in November last year - an indication the MPC was confident the rises were having the desired effect of cooling house prices and curbing high consumer borrowing.
Edmund Amann, senior lecturer in social sciences at Manchester University, told CNN that Brazil's economy is experiencing a consumer-borrowing model of growth.
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The goal has been to energize the economy through more consumer and corporate borrowing.
By buying Treasury and government-agency debt, central banks have financed America's current-account deficit, and pushed down bond yields and mortgage rates, allowing America's consumer spending and borrowing binge to continue for longer.
Recent signals suggest that parts of the UK economy are beginning to grow strongly, led by consumer spending and cheap borrowing.
Instead the government implemented infrastructure spending programmes to spur growth and also provided incentives to encourage consumer spending and corporate borrowing.
So with the economy: the Bank's hopes for a disciplined slowdown in the housing market, borrowing and consumer spending will be difficult to achieve.
Japan's central bank has acted to flood its financial system with more money to try to raise consumer prices, encourage borrowing and help pull the world's third-largest economy out of a prolonged slump.
The recession the Fed is trying so desperately to prevent must be allowed to run its course so that the economy that we have developed over the last decade, the one that is overly reliant on low interest rates, borrowing and consumer spending, can finally restructure itself into something healthier.
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Prior to that, though, the consumer had been on something of a borrowing diet, as the fourth quarter of 2008 saw consumer credit spending fall 3.2% versus the third quarter.
All the evidence points to overheating: an overvalued stockmarket, as well as the consumer-spending spree, borrowing binge and incipient labour shortages.
In May 2012, the Polish central bank went as far as raising its borrowing costs amid elevated consumer-price inflation at the time.
Even before the new law, bankruptcy rates have been rising, fuelled by a rapid rise in consumer debt, especially credit card borrowing and personal loans, which have reached record levels.
And the point that I made was that, you know, the economy was really kept afloat for the last several years by consumer spending, and much of that consumer spending has been fueled by borrowing.
The Federal Reserve Consumer Credit Report released yesterday showed credit card borrowing in July took its first decline in three months.
In recent years large increases in house prices and household borrowing have given a strong boost to consumer spending.
This would reduce the stimulus to consumer spending from households releasing some of their wealth by borrowing against their properties.
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First, they raise the cost of borrowing and so deter new investment or purchases of consumer durables on credit.
Since the rampant stockmarket is, through its wealth effect, now a big contributor to booming consumer spending, it is hard to see demand slowing until borrowing costs rise by rather more.
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