By Kieron McFadden

I've seen it mentioned here and there that a recession is marked by a dropin demand for goods and services. This however is not true. ....
There is no drop in demand. There is however a drop in the availability of thatwhich the consumer uses to EXPRESS demand: money.
It is the money stock that shrinks, NOT the consumer's desire for goods andservices. The quantity of pounds or dollars circulating in the economy becomesless.
People do not suddenly lose interest in buying the washing machines, cars,clothes and manicures they were only too happy to buy the day before.
And all the items that people were happy to buy do not suddenly vanish orbecome unavailable either. They are still there, only now they are stockpilingunsold in industry's warehouses as producers suddenly have trouble selling whatthey have produced.
The consumer did not change. The producer did not change.
So what changed? That which the consumer uses to EXPRESS demand, money, becamemore scarce.
Those tokens called pounds or dollars that he offers in exchange for goods areno longer available to him in the same quantity.
And the irony is that money is the easiest thing in the world to produce.
Why is it no longer available in the same quantity? Because there has been aslow-down of the rate at which money is borrowed into circulation either byindustry, the consumer or government.
A constriction of borrowing occurs because people become more reluctant toborrow or the money lenders make it more difficult to borrow.
It is built into how a debt economy works: no borrowing = no money. No money =no economic activity.
In a debt economy, for one person to get out of debt or even pay a bill orreceive his wages, someone else somewhere must go further INTO debt.
This phenomenon, hidden from view pits us all into unknowing competition withone another for scarce money, each striving at the other's expense to avoidbeing the one who must carry the debt necessary for money to exist.
We live in a time of material plenty, yet the economic environment isinexplicably taut with invisible stresses.
Well, they are no longer so invisible.