Negative savings rate
#1
Posted 22 December 2006 - 02:24 PM
#2
Posted 22 December 2006 - 02:48 PM
They opened up a store in the heart of the Sillycon Valley that will give you pay in advance.....They must charge a big fee for that.....Sign of the time?savingsrate i still very negative, at the same time MEW and credit market borrowing has come down a lot so far this year, to keep up this negative savingsrate the almost only other way to do this is for consumers selling stocks and bonds, this would explain many of the "sentiment" indicators that have for most of the year shown the public being pretty bearish, I can't find any other explanation that would explain both these things at the same time
To bad they are wasting their money on yet another flatscreen tv using up all their savings, I feel sorry for the next generation having to clean this mess up
#3
Posted 22 December 2006 - 02:54 PM
Edited by Sentient Being, 22 December 2006 - 03:00 PM.
~ Johann Wolfgang Von Goethe ~
#4
Posted 22 December 2006 - 03:40 PM
#5
Posted 22 December 2006 - 03:40 PM
#6
Posted 22 December 2006 - 03:59 PM
#7
Posted 22 December 2006 - 04:03 PM
Saving and retirement accounts are different.....For example, you can use savings for vacation.....When they are writing about savings, are they only using saving accounts for the numbers or do the numbers include 401K and IRAs?
#8
Posted 22 December 2006 - 04:51 PM
#9
Posted 22 December 2006 - 05:06 PM
savingsrate i still very negative, at the same time MEW and credit market borrowing has come down a lot so far this year, to keep up this negative savingsrate the almost only other way to do this is for consumers selling stocks and bonds, this would explain many of the "sentiment" indicators that have for most of the year shown the public being pretty bearish, I can't find any other explanation that would explain both these things at the same time
To bad they are wasting their money on yet another flatscreen tv using up all their savings, I feel sorry for the next generation having to clean this mess up
It is not really a negative saving rate because the assets in which people invest are not adequatly counted as savings. On a global level what matters is that someone is saving somewhere.
The problems begin when assets become overpriced relative to the income they produce.
In bubble economics, asset inflation generates consumer spending. As long as asset prices continue to rise there won't be any consequences. One reason stocks are not selling at higher P.E. ratios is because the rising equity values are causing their own growth at least in part.
It is kind of like a guy who owns a store, borrowing on the value of his business, buying all of his own merchandise and counting that as sales and income. If the stock market drops, the economy is in trouble.
James
#10
Posted 22 December 2006 - 06:37 PM