I thought it was really interesting, my FRED graph from the 1st, comparing "U.S. Government Securities" to "Total Investments" at "All Commercial Banks". So when I woke up aimless this morning, I ended up at FRED, looking at that data again.
At FRED, typing total investment into the search box gave me a bunch of Bank of America Merrill Lynch stuff, plus
- Total Investments at All Commercial Banks, and
- Total Loans and Investments at All Commercial Banks
The first of these I had seen on the way to building the graph for 1 July...
I clicked Edit Graph, added the data series LOANINV as a "New Line" and got to see how "Total Loans and Investments" (the red line) compares to "Total Investments" at commercial banks.
Everything below the blue line is investments. Everything above the blue line, up to the red line, is loans.
Then (of course) I had to see the ratio. I clicked Remove Line to get rid of the red line, then added the LOANINV series again -- but this time I clicked "Line 1" first. Then I entered the formula b/a and clicked Redraw Graph.
Persistent increase from 1947 til maybe 1980, then flat.
Or maybe: up fast (1947-1967)... up slow (1967-1979)... up almost not at all (1979-1989)... and then flat or maybe slightly down.
The graph shows a definite transition, whether you see that transition happening at an instant in time, or over a longer period.
I'm a long-period guy, myself. I think I see at 1967 the beginning of the end of the "golden age" that followed World War II. And I definitely see in the 1980s the policy changes of Reaganomics, which arose in response to the death of the golden age.