Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14% in the three months to August (from $7,147bn to $6,886bn).
"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."
The M3 "broad" money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5pc annual rate.
I can't say for certain whether inflation or deflation will prevail - though I do believe that caution is warranted before hopping on the inflation train whole hog. There are a lot of wrinkles to this unfolding saga, no doubt.