Sunday, January 06, 2008

Just Can't Get it Up

The savings rate I mean. We don't even have increasing asset prices and yet Americans still find to spend more than they make.

3 comments:

Ryan Fuller said...

Hmmm... if the supply of loanable funds is lower than the demand, why don't we raise the price of loanable funds?

This is the kind of stupid crap that happens when you combine a fractional reserve system with a central bank that punishes people for saving. Loans are dirt cheap and banks offer jack squat for interest on deposits because money from nowhere accounts for 90% of their loanable funds, so they don't need to do anything to attract savings.

Pete said...

Does savings rate only count the money deposited into traditional savings accounts, or does it also include retirement vehicles, like 401k/Roth IRA/403b/etc?

Captain Capitalism said...

Hi Pete,

No, the savings rate does not include 401k, 403b, IRA savings etc., which is a legitimate point people make. That being said you better hope stock prices stay high when the Baby Boomers retire.