Thursday, August 28, 2014
   
Text Size

Search our Site or Google

U.S. Savings-Rate Drop Shrieks Disaster

Articles & Blogs - US Commentary

User Rating: / 13
PoorBest 

By now, most readers should be familiar with the way the mainstream propaganda machine “spins” the news. When the U.S. savings rate experienced a short, sharp jump higher in response to the Crash of ‘08, media talking-heads saluted a “new generation of thrifty Americans”, whose savings would finance future economic expansion.

Now, with that savings rate having suddenly plummeted again, the propagandists are crowing about how this means “more consumer spending”. What’s truly remarkable about these media pundits is that they will argue either side of the same issue – and yet manage to be wrong both times.

With the simplistic, sound-bite analysis we get from the mainstream media, one of the most elementary aspects of statistics is never explained to readers: they are aggregate numbers. In other words, if we were to say that the U.S. had a savings rate of 2%, this would not mean that everyone was saving 2% of their earnings. Rather, once we averaged-out the different savings (or spending) rates of each individual American they would average out to 2%.

By applying existing economic parameters to these numbers, however, we can engage in a more sophisticated level of analysis. If we flash back to the peak of the U.S. housing bubble, the U.S. economy had managed the dubious achievement of a “negative” savings rate – i.e. the U.S. population as a whole was saving less than zero.

This did not mean that all Americans were depleting their savings. Those at the very top rarely (if ever) cease their relentless hoarding. During the peak of the U.S. housing bubble they were raking-in $trillions – and squirreling it all away. Despite that massive savings, the rest of the population was in the most reckless spending-binge in history, dragging the aggregate number below zero.

What makes this episode such an economic abomination is that for most Americans they were not spending “savings” – they had already depleted their savings. Rather, a large segment of the U.S. population with virtually no savings was leveraging themselves deeper and deeper into debt.

We can then take this context and factor it into the brief surge in the U.S. savings rate which occurred following the Crash of ’08. There was little to celebrate here, despite the reversion from the previous (suicidal) negative savings rate. Contrary to what the aggregate number suggested, all Americans were not saving money.

Those at the top ceased spending, and increased their insatiable hoarding. We know this because even the luxury retailers saw their sales revenues crushed by that crash. Thus, a tiny segment of the population which was already collectively hoarding $100’s of billions per year in new wealth began hoarding even more. By itself, this would account for most of the increase in the savings rate.

A tiny segment of ordinary people, the 10% of the U.S. population which remains “middle class” would have also genuinely increased their savings. For all the rest of the U.S. population there was literally nothing to “save”. These people were already spending more than they were earning every month prior to the Crash. Following that, they either had no jobs, minimum-wage jobs, or were being subjected to repeated pay-cuts because they were supposedly “overpaid”.

These people did not start saving money. Rather, they were ruthlessly cut off from further credit by U.S. banks, making it impossible to continue their “negative savings”. The indebtedness of these Americans continued to rise due to the compounding of interest on their debt combined with falling earnings, while their spending also fell due to being cut-off from more credit – the worst of both worlds for a consumer economy.

Now we hear that the U.S. savings rate is again plummeting toward zero, at its lowest rate since 2007. The propaganda-machine would have us believe that the falling savings rate signals a “pick-up in consumer spending”, the facts suggest otherwise. Strip away the real rate of inflation in the U.S., which has been hovering around 10% all year (as per Shadowstats.com), and U.S. consumer spending has been steadily falling. Simply, Americans are buying fewer goods.

Soaring inflation is causing cash-strapped Americans to go further into debt, to the point where they can afford to buy less and less goods each month. That is the reality of the recent fall in the U.S. savings rate. However, when we combine it with other recent data and events, the picture is nothing less than terrifying.

At the same time that we have news of a plummeting U.S. savings rate, a Reuters headline pointed to “tumbling” consumer confidence, and “stagnant” (i.e. falling) home prices. Along with this, for the last two months we have seen the U.S. manufacturing indices plunge into “recession” levels. Meanwhile, the largest source of new jobs over the past decade – government – has just begun a wave of massive of job-slashing.

At the state and local level, governments continue to hack into their budgets, desperately trying to fend off bankruptcy. With their revenues once again falling (and missing revenue projections), the job-cutting here can only intensify. At the federal level, where Bernanke’s printing press (supposedly) shielded the politicians from fiscal reality, we continue to be promised by both political parties that “massive cuts” to the federal budget are (finally) imminent.

What is more assuredly “imminent” is another wave of money-printing by B.S. Bernanke. To this point all that has restrained him from cranking-out another mountain of Bernanke-bills is the lack of “political cover” to continue on this road to hyperinflation. However, the ECB’s printing press is now running white-hot. U.S. politicians are solely focused upon their own re-election, and eying a “faltering recovery”. Political cover is no longer a problem.

Yet another acceleration in money-printing must inevitably lead to a further spike in the inflation rate, since it is the money-printing itself which is the true definition of “inflation” – inflating the money supply. Here we see how hyperinflations occur.

On the one hand an economic depression severely squeezes government revenues, while simultaneously causing a dramatic spike in benefit payments, to partially alleviate the economic suffering. On the other hand we have governments operating with permanent deficits, and thus no money to spend for “a rainy day”.

With no gold standard to place limits on money-creation, and the bankers constantly whispering into their ears to “print, print, print”; cowardly politicians cave in to expediency and money-printing escalates exponentially, while the anemic economy continues to contract. This causes the speed at which the value of our money plunges toward zero to also begin to escalate exponentially. And that is how all hyperinflations are created.

The actual “detonation event” varies from disaster to disaster, but the economic fundamentals which lead to this economic implosion are always the same: soaring fiscal deficits met with exponentially increasing money-printing. The U.S. economy is literally teetering on this precipice.

To pull back from this economic annihilation requires immediate, forceful action. Bernanke’s printing press must be shut down (preferably, along with the Federal Reserve itself). The Wall Street Vampires (who were nevertoo big to fail”) must be allowed to complete their self-destruction. They must be immediately cut-off from their infinite supply of “free” (newly-printed) 0% money from the Fed.

Meanwhile solvency must be restored to the U.S. Treasury. Following decades of the lowest tax rates in history for those on top, during which time the ultra-wealthy hoarded $10’s of trillions of dollars; those ill-gotten gains must be taxed back. These idle hoards of wealth (the most-massive in history) are needed for constructive purposes.

Not only has this government (and other Western governments) been rendered insolvent so that the top-1% could get much, much wealthier; but those hoards of wealth our literally the “blood” which fuels our economies. The signs of imminent, economic disintegration are everywhere.

The savings rate and “consumer confidence” are not supposed to fall simultaneously. Falling confidence is supposed to cause the savings rate to rise. When people are becoming poorer despite also being less confident, this is a dire scenario.

Similarly, U.S. house prices should not be falling while inflation is spiking. When we add the 10% inflation rate to the (roughly) 4% rate at which U.S. home prices are falling, we get an annual decline (in real dollars) of close to 14% - much worse than during any year of the Great Depression. And yet the propaganda machine is not only calling this an “economic recovery”, but now we have the absurdity of being told that this is an “economic expansion”.

Understand what is occurring here. The only thing which has allowed debt-saturated Western economies to inch back into anemic growth following the two, previous downturns in the business cycle was for ordinary people to take on huge amounts of debt. Our governments would proclaim a “recovery”, and hoards of Pavlov’s Dogs would resume shopping – on credit.

Now the credit has been maxed-out. The politicians (with the aid of their media megaphone) have again proclaimed a “recovery”, and they literally don’t understand why our economies are not once again growing. They don’t understand that when you allow the top-1% of a population to hoard all of the wealth that such an economy will ‘starve to death’ and die, as economies have been doing for more than 2,000 years.

It is one thing to be speeding toward a cliff in a vehicle with no breaks. It is something far, far worse to be doing so when the driver is blind.

Trackback(0)
Comments (2)Add Comment
Jeff Nielson
...
written by Jeff Nielson, November 16, 2011
Lol Dalkrin!

Yes, it's true that being a Disciple of Good Money does tend to isolate one socially. Most people don't UNDERSTAND why we hold gold and silver in the first place, since it's not intuitively obvious and FEW are willing to really strain their brains THINKING about it.

And as you observed, those of us who DO understand "good money" also generally realize that the same governments who have thoroughly debauched their own paper money have simultaneously brought utter ruin to our economies.

People who don't want to hear about "gold and silver money" because it might 'angry-up' their brain cells CERTAINLY don't want to listen about how we are nearing a Greater Depression (in Canada), and how it's already arrived in the U.S.
Dalkrin
...
written by Dalkrin, November 16, 2011
I am doing all I can to keep that savings rate above a shameful null.
In fact, I would guess I save close to 40-45% of my income.

Needless to say, I'm a scream at parties, and a consummate socializer.
Actually, my silver coins are my only friends, along with my stockpiles of canned food. I rejoice in investing in worldwide miners and businesses, yet on my vacation I hardly leave the house.

Sometimes I envy the 0% savers. Living in the moment, enjoying the goods and services that debt can cover. Who knows, maybe they are right? Who's to say we won't die before our bill comes due, or our doomsday insurance is activated?

Tricked you there. No deviation from the hard-money path here. Persist, and we shall emerge the wiser, and with ribs not so visible.

Sorry for the rambling, just my thoughts on a tangential night.


Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy

Latest Commentary

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12

Latest Comments

Disclaimer:

BullionBullsCanada.com is not a registered investment advisor - Stock information is for educational purposes ONLY. Bullion Bulls Canada does not make "buy" or "sell" recommendations for any company. Rather, we seek to find and identify Canadian companies who we see as having good growth potential. It is up to individual investors to do their own "due diligence" or to consult with their financial advisor - to determine whether any particular company is a suitable investment for themselves.

Login Form

generic acticin cost where did the story of purim take place cytotec over the counter drugs house for sale st davids wood artane does ortho tri cyclen lo have generic version innopran xl buy canada best online pharmacy mexico phone in order for lipothin why shortage of doxycycline healthy heart rate 20 year old male is benadryl sold over the counter purchase tricor pills entocort pharmacy xeloda side effects duration sale xalatan sandoz lisinopril 10 mg cafergot online coupon code bupropion generic manufacturers generic clonidine in transdermal consumer information bactrim f dosis is mirapex a prescription drug furosemide combination where to buy tadalafil pill shop discount medications broker accutane 40 mg for sale buy trileptal online no prescription united states long term side effects of levothyroxine get prescription without doctor visit eve mentat cache import cialis viagra combo pack phone number search by address tadapox generico online apcalis sx dosage recommended buy mentax online overnight what is cipro now called best pharmacy schools us 2010 how to take ephedrine caffeine and aspirin buspar shopping rumalaya gel coupons generic brand for keflex mircette daily use reviews buy dipyridamole no prescription fast delivery prograf generic cheap costs +gout medication canadian atorlip-20 usa cvs prices cheap canada buy zyprexa glucotrol xl to buy from europe order amoxil online pharmacy avodart hair loss reviews caverta discounts codes can i get artane what is rosuvastatin crestor tofranil generico italiano buy keftab boots pharmacy para que se usa el bupropion safe to buy generic atarax from uk combivent inhalers online without script purchase minocin pill rx health order bactrim antibiotics products how to purchase januvia buy shop cialis mail order carafate online recommended dose of diflucan for yeast infection low cost isoniazid how to purchase tenormin online novolog insulin pump buy septilin online reviews how to use cardura cheap apcalis sx pills bupropion prescription online phenergan lawsuit canada hydrochlorothiazide combo can lisinopril hctz cause weight gain nolvadex side effects gynecomastia hyaluronic acid dose for skin propecia side effects prednisolone medication online what is clotrimazole and betamethasone dipropionate cream usp used for buy nexium in usa order yasmin overnight finasteride usp 5 mg drug nolvadex dosage after superdrol vitamin shoppe coupon december 2012 ordering cytotec purchase toradol online half price exelon purchase rumalaya forte online antabuse medicine children what is alavert tablets fml forte prescription only can you buy septilin lowest sinequan on line no script viagra sublingual shoppers drug mart tadalafil 40 mg uk seroquel 50 mg tablets bactrim mg canada nizoral 100mg what does ataraxia mean olanzapine barato buy requip australia how to order voveran sr lamisil 250mg tablets side effects low price kamagra uk paxil cost walgreens order antabuse 250 mg order wellbutrin sr on line india primatene mist without cfc what is ic citalopram hbr 20 mg buy nitroglycerin explosive medications online uk buy torsemide lowest price let me watch this channel 1 geordie shore prilosec and weight gain now buy chloroquine with visa best price cipro what is v-gel made of speman medicine children liposafe canada no prescription amantadine in the uk now where to buy clomid online usa lesofat where can i buy sulfamethoxazole trimethoprim low acivir pills drugstore canadian geriforte syrup online in us buy cheap levlen pills metoclopramide tablets 5mg risperdal consta injection price penegra prices at costco cardura without script risperdal for sale uk buy accutane without prescription 40 mg buy premarin online safely buy lanoxin in ireland can you get thrush from keflex what is diclofenac pot 50mg used for nexium 20 mg dosage avapro australia price pilex 100mg cheep promethazine no prescription needed losartan 100 mg hydrochlorothiazide 25 mg chloramphenicol 250 mg is levothyroxine free on nhs gnc health shop on line mens viagra my alli side effects buy malegra fxt inhaler canada buy vantin online amazon cialis reviews forum cheap where can i buy brahmin handbags best generic levothroid sites avodart mg tablet can you get high off antabuse buy etodolac online pharmacy generic pyridium canada western drug serpina amitriptyline withdrawal symptoms period buy acai 20 manfaat obat lasix 40 mg ordering mevacor usa bupron sr mail order buy ortho tri-cyclen visa buy live fish bait extreme acai berry melt-away tablets review para que se usa el medicamento tegretol cheap extendaquin no prescription uesp oblivion meridia how much does paroxetine cost without insurance how to get the most out of cialis buy acai with paypal broad spectrum antibiotics cheap zyrtec sale uk cipla fieldcall report generic viagra 100mg pills ranitidine 20 mg what is hydrochlorothiazide generic for what is a groggers for purim getting tenormin in australia worldwide pharmacy metformin buy lady era 15mg online lexapro tablets 5mg buy florinef 1 mg allopurinol without a perscription non prescription urispas abilify pills online in the india discount coupon drugstore code is there a generic for requip buy reductil sibutramine online digoxin side effects rxlist buy betnovate n skin cream viagra professional uses medication nitrofurantoin from usa pharmacy glucophage pas cher italie bactroban buy online ireland order flonase on line usa where can i get yasmin pill order orlistat on line usa what is the usual dosage for abilify cheaperviagra generic medicine for asacol can you smoke dilaudid hydromorphone generic lanoxin switzerland cipralex side effects memory loss zanaflex birth control online canada original aleve online generic metformin overnite shipping metformin brand name generic name mens health generic viagra ampicillin delivery uk prednisone dosepak 5mg online pharmacy india chennai cipro recommended dosage for uti canadian medications cheap allegra price cvs better than rumalaya special care pharmacy san juan puerto rico avapro in buy generic 150mg levitra cost can you buy inhalers for asthma over the counter zoloft prescription drug buy viagra australia online no prescription buying zantac using paypal purchasing reglan online uk ultra low dose doxazosin cost of roxithromycin cheap crestor 20mg best online pharmacy generic astelin arjuna order cheap olanzapine india grifulvin v 10 mg cost venlor dosage too high retail price of maxalt mlt cost of mirapex without insurance cheap finpecia uk antibiotics online no prescription usa avodart medication prostate cancer is synthroid t4 order viagra uk canadian hydrochlorothiazide esidrix hydrodiuril microzide buy cialis from canada lisinopril maximum recommended dose buy erection packs 3 online without prescription where do i buy prednisone allegra online what is benzac cream crestor 20mg tablets can you get pregnant while taking topamax non prescription drugs for anxiety what is diovan prescribed for elavil reviews for pain cordarone without prescription canada free viagra coupon what is the maximum dosage for keppra canadian lotensin buy viagra with paypal prescription haldol druppels toedienen levitra professional online from uk buy over the counter retin-a ge online shallaki sold over counter buy alli diet pills philippines canadian dramamine from canada how to order uroxatral online rayrx reviews pulmicort over counter uk can you buy adalat cc prescription why has sinequan been discontinued best price for real vytorin where to buy benzac wash zocor heart pro buy online legal buy ortho tri-cyclen online canada prednisolone on line most reliable place to buy luvox online paroxetine overnight shipping online estrace mexico can you order fucidin cheap trental 100mg generic from amitriptyline generic reviews forum discount viagra online sales 2009 diovan patent alesse birth control prices soft sale buy cialis tabs where can i purchase lasix non prescription aldactone pharmacy glycomet 10 mg what does a zoloft high feel like no prescription omnicef sale orlistat tablets from buy does valtrex stop transmission herpes allopurinol in india where to buy thyroid meds buy fml forte online amazon avalide without food diovan 160mg tablet the doctor has ordered tetracycline 5g alesse birth control pills review ventolin albuterol of salbutamol lov cost avalide morning after pill effectiveness 48 hours what is the best drug for erectile dysfunction acheter livebox play gout allopurinol colchicine cephalexin mims australia la voz de maria massa del padre chelo betamethasone valerate cream bp betnovate buy nizoral 10 maximum dosage of benfotiamine azithromycin generic teva ciprofloxacin dosage suprax low cost can you get chlamydia test boots renagel pills sweat alphagan canada overnight delivery deltasone online meds zebeta 50mg tablets buy over the counter purchase viagra can you drink alcohol on roxithromycin order duetact mg erection pills canada where to purchase casodex comprar chloramphenicol pela internet vermox 20 mg ml sospensione orale posologia micardis fast canada kamagra uk fast delivery elocon on line for sale no script detrol uk next day delivery can cleocin get you high long term side effects doxycycline hyclate comprar tenormin online birth control pills clonidine high dose of prednisone for cats cuvarlix malaysia viagra plus price india lasix next day chloroquine phosphate 250 mg tablets anti seizure medication keppra side effects amlodipine valsartan hydrochlorothiazide tablets cordarone x tablets heart nexium 40 mg side effects prescription propecia online half price skelaxin what is the medication doxazosin mesylate buy alli bactroban pharmacy side effects of crestor rosuvastatin 20 mg citalopram maximum dosage buy zyban with visa asthma inhalers types buy aldactone uk canadian how to purchase brand levitra online is metronidazole cream available over the counter what is dramamine roxithromycin cheap canada pharmacy cheap canadian zyloprim no prescription what does seroquel 25 mg look like viagra plus dosage recommended comprar tamoxifeno claritin tablets from buy where do i buy brand cialis amoxicillin or bactrim for uti augmentin 875 mg-125 mg tablet best place to buy amantadine in usa buy cleocin with e check isoptin australia price xenical canadian pharmacy what is atenolol comprar uroxatral original international pharmacies no prescription order suprax lowest price nootropil suppliers overseas cvs pharmacy puerto rico san juan what are meclizine 25 mg rx tablets used for buy ditropan tablets online what is biaxin filmtab 500 mg used for haldol generic wikipedia drugs discounts for sildenafil how long does it take for lamisil pills to work antabuse from usa order cialis online safe buy forzest in uk aciphex cost per pill cytoxan to buy in england buy himcolin boots pharmacy seroflo no prescription compare prices what is paroxetine made of genuine pravachol 100mg buy metronidazole canada pharmacies alliance ohio how much does bactrim cost at walmart med cab colospa what is seroquel for sleeping kamagra oral jelly online order cardizem dosage tachycardia buy exelon hong kong cheapest pharmacy what does the drug baclofen do saw palmetto over counter uk clomid ovulation calculator tool comprar flonase original en madrid where to buy anacin how long does zetia take to work cheapest celadrin french pharmacies in london cyklokapron injection price safe nexium buy cialis generico brasil toprol where to get what is endep used to treat order pain meds online cheap genuine florinef online use aleve coupon online blopress plus 8 mg to buy forzest in uk where can i buy permethrin 5 cream over the counter chep viagra cost of accutane 2013 hydrea reviews for men what is levitra professional made of purchasing arava online uk what is aspirin delayed release tablets dilantin 40 mg dose acai palm trees for sale dapoxetine peak sales vente de diflucan au quebec serevent uses medication hfa ventolin coupons zenegra overnight delivery where to purchase zyrtec triamterene-h-sobhan vermox 100mg tabletki 6 szt ulotka buy dipyridamole in australia buy dulcolax inhaler canada prescription online allopurinol without buy over the counter diabecon online benicar italiano como comprar cymbalta com desconto accutane reviews 2009 liposafe canada sale what does a coumadin pill look like medrol generic wikipedia drugs where can i order lotensin capoten online in canada does alli work discount code motilium 10mg mcneil periactin fast uk diflucan shelf life cephalexin side effects long term use nexium coupons 2011 how much does zithromax z-pak cost which uk site to buy cialis professional requip xl manufacturer coupons where to buy accutane online topix cheap actos meds 5 mg abilify bipolar buy actoplus mg online fast flovent deleviery unisom cheap price online sale of minipress capoten sublinguale buy benadryl pills piroxicam side effects ciplox 100mg cheap prednisone tapering dose copd what is mobic 15 mg used for order premarin from mexican pharmacy toradol purchase in canada no prescription lowest priced yasmin generic cipro switzerland low cost overnight viagra sublingual seroflo comprar where to alesse ovral l generic estrace cream dosage what is the mode of action for ampicillin atorlip-20 delivery uk do i need a prescription for cytoxan starlix sale does paxil cause weight gain women nizoral shampoo online bestellen viagra professional prices cvs buy xeloda generic levothroid switzerland fluoxetine discontinued tadalafil 20 mg reviews how to order shuddha guggulu i pill avandamet website discount coupon acai burn combivent in the uk now info on alli weight loss program what does dramamine do to dogs pravachol pills sweat buy remeron fast shipping diltiazem dose atrial fibrillation lanoxin results forum imuran order by phone to buy eulexin vermox where to purchase can you buy cialis over the counter in france post cycle therapy roxithromycin over counter brand levitra alli weight loss aid capsules where to buy carbozyne ointment generic tamoxifen us ed rush optical sample pack best place buy zoloft pct buy leukeran online to buy norvasc in uk cheap kytril no prescription what can you buy with paypal balance buy 21 online brand alesse order metoclopramide from rhinocort tablets side effects best website to buy neurontin without a prescription female viagra where to get cheap accutane delivered overnight cialis black 800 mg proventil generic cheap costs list of prescription drugs available in mexico buy bactroban over counter get minipress las vegas suppliers of rumalaya gel in us use reglan coupon online benzac online pay paypal yasmin boland capricorn micardis cheap price order celebrex cheap legal to buy proscar optimmune ophthalmic ointment why has himcocid been discontinued metronidazole 500mg without prescription in. us drugs similar to vermox ethionamide drug schedule albenza overseas is abilify over the counter prescription drugs online viagra metoclopramide dose pediatric eurax canada head office buy rumalaya forte 80 mg online non persciption revatio what are the side effects of fucidin cream arimidex next day lowest price on real viagra number pharmacies latin america buy minipress quick emsam cost comparison tofranil pm price acheter pas cher biaxin generic name for cytoxan ampicillin medication overnight delivery cialis professional mist canada paroxetine cost without insurance buspar 10 mg tablet remeron shortage prazosin medicinenet compare prices estrace chlamydia antibiotics can you drink