First of all we need to see, what is credit?
It is a transaction of sale and purchase with out the purchaser making an immediate payment or having a payment made through a financial agency on his behalf to whom he would be paying later. This payment through a financial agency is not the payment in real money, it is an advice from one bank to another, where by by virtue of a document a certain amount is made available, in reality it is intangible.
A credit crunch is when most of the purchasers are unable to sell stock or collect on it in the economic slowdown and cannot pay their vendors.
The question is when will it end; to answer this question to need to take a couple of steps back, it all kicked in with an accelerator effect in 2007-2008, where as the American economy had been on crutches well before the 9/11, therefore, to conclude that it was the failure of the mortgage market in the US would be incorrect. A step back further, when the American mortgage market saw rise in sales, lending started, everyone from almost all over the US and even international buyers jumped on the band wagon.
These buyers from within the US and out of it apparently were buyers but many of them were wolves in a sheep's hide, the venture capitalists, the speculators, they played with prices, purchasing started, the lending agencies, perhaps owned by a few of them as well, the interest rates were very interesting then. These were the culprits, not only in the US but the world over, these few venture capitalists started it and start it.
It took roots as every one saw the realizable profits in short term, it grew and grew the lending agencies quietly watched although they had an idea of the implication of over supply of money but kept on lending till the time they were making their profits.
It took millions to just clean the shit - nothing more, all money on corporations were given glamorous titles to make it look like an effort to revive; window dressing!
The recession period as we are going through it and surely be coming out of it soon is only till the time each individual government takes initiatives within its own country to kick start its economy, looking up to America to come up with a genius plan is sheer stupidity; if America was so smart why did it all start from its territories?
