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The war on savings
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The war on savings, that's what market fundamentalist often call the unconventional policies of the Fed after the financial crash in 2008. They also argue that the Fed is responsible for the huge increase in inequality. See for instance the very first comment in an article here:


Quote:Inflation is the friend of those who want to keep running debt and printing money which includes the government and central banks. It is not those with money especially at these rates. The Federal Reserve should stop lying. They are essentially bankrupting the baby boomer retiring class to keep bankers junk debt loans they are choking on afloat. Stop it already.

Now let's see who actually saves. Below you see how, from the mid 1980s (after the recovery from the recession), the saving rate is going down for the bottom 90% of households
[Image: 191022_14527966182417_1.jpg]

You see that the savings rate of the bottom 90%(!) of households, after even going negative in the decade before the financial crisis went negative, and is still essentially zero. Since US households save on average is a little above 5% (see figure below).
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[Image: united-states-personal-savings.png?s=uni...603120407n]




This means that basically all the savings come from the top 10% of households, which means that they save far in excess of 5% of their income. 

This basically means that the Fed policies is hurting the rich and favoring the bottom 90% of households, who are also likely to be more in debt so the Fed's efforts to get inflation up would also benefit them.

Of course, this is not a complete picture, the top 10% also hold far more financial assets, which have benefited from unconventional monetary policy, but it does show that it is nonsense to argue that the Fed is bankrupting the baby boomer class in its "war on savings"
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Messages In This Thread
The war on savings - by stpioc - 03-12-2016, 01:19 PM
RE: The war on savings - by fsilk - 03-19-2016, 01:26 PM
RE: The war on savings - by stpioc - 03-20-2016, 01:26 AM

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