Are savers doomed?

[FlyerInHi]

[quote=spdrun]If you’re putting the money into the right things, you’ll be fine. The right things might just not be savings accounts right now :)[/quote]

That’s exactly it.

Why do people expect money, an exchange medium, to itself be an investment vehicle and increase in value?

You need to do some work and buy the right things with your money.

[spdrun]

It should stay steady in value, at least (IMHO). People who worked should be allowed to keep their savings, not run on the fucking treadmill like hamsters their whole lives.

[CA renter]

[quote=spdrun]It should stay steady in value, at least (IMHO). People who worked should be allowed to keep their savings, not run on the fucking treadmill like hamsters their whole lives.[/quote]

Agree with this.

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AN,

I don’t think we’ll see a repeat of the 70s and 80s. Why?

1. We went off the gold standard in 1971.

https://history.state.gov/milestones/1969-1976/nixon-shock

2. The credit market began expanding at all levels.

http://research.stlouisfed.org/fred2/series/TOTALSL/

http://useconomy.about.com/od/usdebtanddeficit/a/National-Debt-by-Year.htm

3. The Baby Boomers — who were the largest population bulge at that time AND who were one of the last generations to do better than the generation before them — began reached peak earning/purchasing years.

http://investing.covestor.com/2014/05/will-retiring-baby-boomers-derail-economy

4. Women entered the workforce en masse. This brought additional purchasing power to many households (but it also increase prices and lowered wages, which has reduced purchasing power over the years…because of this, more women are now leaving the workforce)

http://www.marketwatch.com/story/more-women-are-quitting-the-workforce-2014-10-03

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All of those things have already pushed prices up, and we are now at a turning point where things are about to reverse (or have already started), IMO.

What do you see that will manage to not only offset these declining trends, but to reverse them altogether and push things back up? Yes, getting more money into the hands of the masses (workers and consumers, especially at the post populous levels) would help.

I sincerely hope that this happens, and I write/call/volunteer to make it happen, but still doubt that we will be able to shift the power back to “the people” anytime in the near future. People are very gradually beginning to wake up, but we have a long, long way to go. Glad to see you are more optimistic about this than I am.

[The-Shoveler]

“AND who were one of the last generations to do better than the generation ”

IMO this is going to be proven so wrong I don’t know where to start, except that was almost the exact same thing they were telling us in 1976-9 LOL.

First The millennials are going to inherent at least twice as much from the boomers as the boomers got from their parents LOL.

The USA is in a so much more better state than we were in 1980 it is laughable when I hear people talk about the demise of the U.S.A.

Anyway this is pointless so I give up arguing about this anymore.

[scaredyclassic]

[quote=The-Shoveler]”AND who were one of the last generations to do better than the generation ”

IMO this is going to be proven so wrong I don’t know where to start, except that was almost the exact same thing they were telling us in 1976-9 LOL.

First The millennials are going to inherent at least twice as much from the boomers as the boomers got from their parents LOL.

The USA is in a so much more better state than we were in 1980 it is laughable when I hear people talk about the demise of the U.S.A.

Anyway this is pointless so I give up arguing about this anymore.[/quote]

I was there in 1980. It was bleak.

[Anonymous]

There is no such thing as a saver.

If your balance sheet is positive, you are an investor.

A mistake that many people make is believing they can avoid the risks of investing.

Remember the saying about “choosing not to decide is still a choice” ?

I never really liked Rush, but that statement is true.

[Anonymous]

[quote=scaredyclassic]I was there in 1980. It was bleak.[/quote]

I was in the Rust Belt in 1980.

Definitely bleak.

The notion that this generation is worse off than previous ones is complete nonsense.

[SD Transplant]

I savers are doing well in a global economy. Look around a bit, the $ is king again. The ruble is 1/2 its value in the last few months, the Euro’s forecast to be back on parity 1:1 with the $ by the end of the year. If you are a US saver and invest globally, this is a great opportunity.

Think about how much cash in $ is sitting in US corporations ready to buy at discounted prices.

[livinincali]

[quote=The-Shoveler]”AND who were one of the last generations to do better than the generation ”

IMO this is going to be proven so wrong I don’t know where to start, except that was almost the exact same thing they were telling us in 1976-9 LOL.

First The millennials are going to inherent at least twice as much from the boomers as the boomers got from their parents LOL.

The USA is in a so much more better state than we were in 1980 it is laughable when I hear people talk about the demise of the U.S.A.

Anyway this is pointless so I give up arguing about this anymore.[/quote]

As long as you ignore the liability side of the balance sheet.

[spdrun]

If we want to use a 1980s analogy, 1980 was 2009. So we’re at 1986 now.

As far as people inheriting, what does that translate to in purchasing power considering the cost of housing now?

[The-Shoveler]

It was NEVER easy to buy a home in SoCal.

It just looks that way in hindsight. It always meant driving til you could afford and that first house was an old fixer that took everything you had.

IT WAS NOT EASY!!!

[moneymaker]

I don’t think savers are doomed. It’s not about interest rates or deflation alone, it’s all about purchasing power for the savers, which is ironic since by definition they aren’t spending.

[an]

To put housing cost into historical perspective, lets take this house for example: http://www.sdlookup.com/MLS-150001489-17050_Edina_Ct_Poway_CA_92064

In 1989, it was sold for $625,000. The mortgage rate back then was ~9%, which means the monthly payment was $4000/month.
In 2014, it’s asking for ~$1.2M. The mortgage today is ~3.750%. Which means the mortgage is ~$4500/month.

So, over 25 years, the monthly payment difference between someone who bought that house today vs 25 years ago is only 12.5%. That’s much less than the rate of inflation & income growth over the last 25 years. So, it’s much cheaper to buy today than it was 25 years ago.

[FlyerInHi]

[quote=CA renter][quote=spdrun]It should stay steady in value, at least (IMHO). People who worked should be allowed to keep their savings, not run on the fucking treadmill like hamsters their whole lives.[/quote]

Agree with this
[/quote]

How does that speak to “idle capital” ?

[flyer]

It still amazes me that only around 5% of the US population have a sustained net worth of over a million or more–which is really the “bottom
line”–regardless of age–or how you got there.

[Author]

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