savings

If the Chairman has to do something, then the real question is what policy response is adequate to a) reviving asset prices and b) returning the US to trend real GDP growth (since the portfolio balance channel appears to be the only one…

This is a stunning stat and shows how out of touch Washington and Wall Street are with Main Street. Imagine if gas prices spike $2.00 per gallon.

In case you did not notice it, the much discussed "range" on the SP500 broke in spectacular fashion today as the short rollers bypassed the 1250 mark in the same style as the Germany panzer passed the Maginot line back in the early stages…

What does it mean that disposable income was revised down all three years, yet the savings rate was revised down in 2009 and 2010? I think it means that people were under debt stress trying to maintain lifestyles once the technical recovery…

When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account…

In this column, Michael Pettis uses Germany and Spain as examples of the interplay between savings rates, trade balances and economic policy. Looking at this interplay, it turns out that domestic policies by the German government can…

Raghuram Rajan, one of the few mainstream economists to warn of the US housing bubble, has recently written a piece which is highly critical of US monetary policy. His view, one that I share, is that US policy favours debtors over savers in…

If the public sector balance must over time move from around -10 percent to around -3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by…

The Federal Reserve will be on easy street for a long time to come. Real interest rates will remain low, meaning debtors will be favoured over savers. Investors in fixed–income will take it on the chin.

The personal savings rate came in at 4.9%, the lowest since October 2008 before the Lehman crisis caused savings rates to jump up. Below are a few charts for a historical perspective.