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Recent data on lending from the Federal Reserve shows loan growth surging. In the past three weeks total loans and leases at commercial banks in the U.S. grew by $122 bln to $7.28 trillion. This is a sign of sharply rising loan demand for such things as homes and autos. It’s clearly a sign of an improving economy. Moreover, with household debt burdens now at the lowest level since the early 1980s, it’s not unreasonable to expect a new credit cycle to begin. Increasing bank lending will fuel the next phase of this economic recovery and will be a very important factor in what’s likely to be significant cutbacks in government spending.