Chart below that depicts leading US Treasury spending vs. SP500 Sales vs SP500 earnings over the recent long term in time domain.
Of interest is the linearity in the growth of both Treasury spending and SP500 sales over the time period leading up to the "GFC" in 2008, about from the years 2001 thru 2007.
While if we look at the below chart depicting the growth in the Fed's H.8 Loans and Leases in Bank Credit over this same time period that we showed here last week, we can see the NON-linearity of the growth in the establishment of these balances over this same time period.
So even though bank credit was growing exponentially, we can see no exponential growth in sales by firms over this same time period.
This observation might make one want to wonder: "Where did the money go?".
"Loans create deposits" is a true statement; and we can see that loans and hence the derivative deposits were being established in exponential growth over this time period, while concurrent sales by the large SP500 firms were not growing exponentially, seemingly responding to the linear growth in leading US Treasury spending rather than non-linear growth in "Bank Credit".
Intuitively we might think that an exponential increase in Bank Credit would lead to an exponential increase in at least sales by firms (if not earnings), but that does not appear to be the way the system is functioning.