Private savings and public deficits

[barnaby33]

AK beat me to it. I was just going to say, “China!”

[AK]

I know the money’s not in the Social Security Trust Fund 🙂

Thanks for the props everyone. I’m a “soft Keynesian” and I believe in the necessity of a stimulus, but I’m not ready to believe that deficits don’t matter … much less that multi-trillion deficits will bring back a long-lost era of prosperity and harmony. (Starring Jerry Mathers as The Beaver.)

[AK]

I know the money’s not in the Social Security Trust Fund 🙂

Thanks for the props everyone. I’m a “soft Keynesian” and I believe in the necessity of a stimulus, but I’m not ready to believe that deficits don’t matter … much less that multi-trillion deficits will bring back a long-lost era of prosperity and harmony. (Starring Jerry Mathers as The Beaver.)

[AK]

I know the money’s not in the Social Security Trust Fund 🙂

Thanks for the props everyone. I’m a “soft Keynesian” and I believe in the necessity of a stimulus, but I’m not ready to believe that deficits don’t matter … much less that multi-trillion deficits will bring back a long-lost era of prosperity and harmony. (Starring Jerry Mathers as The Beaver.)

[AK]

I know the money’s not in the Social Security Trust Fund 🙂

Thanks for the props everyone. I’m a “soft Keynesian” and I believe in the necessity of a stimulus, but I’m not ready to believe that deficits don’t matter … much less that multi-trillion deficits will bring back a long-lost era of prosperity and harmony. (Starring Jerry Mathers as The Beaver.)

[AK]

I know the money’s not in the Social Security Trust Fund 🙂

Thanks for the props everyone. I’m a “soft Keynesian” and I believe in the necessity of a stimulus, but I’m not ready to believe that deficits don’t matter … much less that multi-trillion deficits will bring back a long-lost era of prosperity and harmony. (Starring Jerry Mathers as The Beaver.)

[DWCAP]

Not to mention that the BRIC countries are still living on an “export to the USA” economic model right now. Considering that US consumers arnt in a buying mood right now, that isnt the best economic model to have.
Not saying they cant get off it, but itll take some adjustments. If you are investing in these countries, watch out for a very much needed and expected switch to domestic consumption vs export.

[DWCAP]

Not to mention that the BRIC countries are still living on an “export to the USA” economic model right now. Considering that US consumers arnt in a buying mood right now, that isnt the best economic model to have.
Not saying they cant get off it, but itll take some adjustments. If you are investing in these countries, watch out for a very much needed and expected switch to domestic consumption vs export.

[DWCAP]

Not to mention that the BRIC countries are still living on an “export to the USA” economic model right now. Considering that US consumers arnt in a buying mood right now, that isnt the best economic model to have.
Not saying they cant get off it, but itll take some adjustments. If you are investing in these countries, watch out for a very much needed and expected switch to domestic consumption vs export.

[DWCAP]

Not to mention that the BRIC countries are still living on an “export to the USA” economic model right now. Considering that US consumers arnt in a buying mood right now, that isnt the best economic model to have.
Not saying they cant get off it, but itll take some adjustments. If you are investing in these countries, watch out for a very much needed and expected switch to domestic consumption vs export.

[DWCAP]

Not to mention that the BRIC countries are still living on an “export to the USA” economic model right now. Considering that US consumers arnt in a buying mood right now, that isnt the best economic model to have.
Not saying they cant get off it, but itll take some adjustments. If you are investing in these countries, watch out for a very much needed and expected switch to domestic consumption vs export.

[Eugene]

What’s the point of saving if the yield is below 2%/year before taxes? HSBC has recently dropped the APY of my formerly “high-yield” savings account to 1.45%. Might as well spend that money on a shiny new toy.

If yields get back to 5%, people will start saving more.

And a more general thought. There isn’t much demand for investment in the United States (in Europe, too). Especially now that the housing bubble is over. Investment demand is normally created when big companies issue bonds to finance some kind of expansion. Who needs to expand in the developed world nowadays? Do we not have enough malls? Do we not have enough cars in every household? Do we need TWO big screen TV’s in every room instead of one?

Aside from the government spending on infrastructure and healthcare, I don’t really see much potential for investment in this country, or elsewhere in the developed world, any time soon.

The real place where you might want to take your dollars is BRIC. (Minus Russia, which has deep geographical problems that prevent large-scale industrialization, and so it should not be grouped with the other three).

Problem is, as far as I know, it’s not even possible to invest in Chinese and Indian bonds unless you live there.

[Eugene]

What’s the point of saving if the yield is below 2%/year before taxes? HSBC has recently dropped the APY of my formerly “high-yield” savings account to 1.45%. Might as well spend that money on a shiny new toy.

If yields get back to 5%, people will start saving more.

And a more general thought. There isn’t much demand for investment in the United States (in Europe, too). Especially now that the housing bubble is over. Investment demand is normally created when big companies issue bonds to finance some kind of expansion. Who needs to expand in the developed world nowadays? Do we not have enough malls? Do we not have enough cars in every household? Do we need TWO big screen TV’s in every room instead of one?

Aside from the government spending on infrastructure and healthcare, I don’t really see much potential for investment in this country, or elsewhere in the developed world, any time soon.

The real place where you might want to take your dollars is BRIC. (Minus Russia, which has deep geographical problems that prevent large-scale industrialization, and so it should not be grouped with the other three).

Problem is, as far as I know, it’s not even possible to invest in Chinese and Indian bonds unless you live there.

[Eugene]

What’s the point of saving if the yield is below 2%/year before taxes? HSBC has recently dropped the APY of my formerly “high-yield” savings account to 1.45%. Might as well spend that money on a shiny new toy.

If yields get back to 5%, people will start saving more.

And a more general thought. There isn’t much demand for investment in the United States (in Europe, too). Especially now that the housing bubble is over. Investment demand is normally created when big companies issue bonds to finance some kind of expansion. Who needs to expand in the developed world nowadays? Do we not have enough malls? Do we not have enough cars in every household? Do we need TWO big screen TV’s in every room instead of one?

Aside from the government spending on infrastructure and healthcare, I don’t really see much potential for investment in this country, or elsewhere in the developed world, any time soon.

The real place where you might want to take your dollars is BRIC. (Minus Russia, which has deep geographical problems that prevent large-scale industrialization, and so it should not be grouped with the other three).

Problem is, as far as I know, it’s not even possible to invest in Chinese and Indian bonds unless you live there.

[Eugene]

What’s the point of saving if the yield is below 2%/year before taxes? HSBC has recently dropped the APY of my formerly “high-yield” savings account to 1.45%. Might as well spend that money on a shiny new toy.

If yields get back to 5%, people will start saving more.

And a more general thought. There isn’t much demand for investment in the United States (in Europe, too). Especially now that the housing bubble is over. Investment demand is normally created when big companies issue bonds to finance some kind of expansion. Who needs to expand in the developed world nowadays? Do we not have enough malls? Do we not have enough cars in every household? Do we need TWO big screen TV’s in every room instead of one?

Aside from the government spending on infrastructure and healthcare, I don’t really see much potential for investment in this country, or elsewhere in the developed world, any time soon.

The real place where you might want to take your dollars is BRIC. (Minus Russia, which has deep geographical problems that prevent large-scale industrialization, and so it should not be grouped with the other three).

Problem is, as far as I know, it’s not even possible to invest in Chinese and Indian bonds unless you live there.

[Author]

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