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Debt, Spending, & Keynesian Foolishness
#51
jt Wrote:
mr_yak Wrote:Good article today from Bill Gross on the nature of debt and living standards ...

(Disclaimer: I've turned this guy loose with a bunch of my money ... mostly because he reminds me of me ... only much, much, MUCH smarter.)

Market returns on the Threshold of Mediocrity
Mr. Gross forgot to mention the governmental intervention in the debt markets (e.g. the Fed), keeping interest rates low and distorting the market price (interest) for money. Why save if you cannot get a decent interest on your money? It has been this way for the last 20 years or so, and stimulates consumption rather than saving.

Zero interest rates are part of the bait and switch. Japan could sustain that sh*t for a decade ... and look what it got 'em. WE AREN'T JAPAN ... (... or China) they went into it with a much higher savings rate ... and 'reserves' that consist of more than just promises and "faith and trust". Dr. _Rugman can grouse all he wants about a "Depression" because we simply haven't "spent enough". The truth is that we are in a crack. One side of it is that the split second after any sort of 'real' recovery, inflation is going to flame up like a demon. The other side of it is John's comment above ... involving prolonged suck ... because of a complete disincentive toward private equity investment and a dearth of 'private' cash available for it .

Toward your question, the reasons for saving remain the same ... retirement, your kids education, a house ... you save because you wish to reach your goals ... even at zero interest rates. Because you can't 'finance' your retirement ... and your ability to employ credit for the other items is likely to be vastly restricted in the future ... that's Gross's point. Living standards ... particularly those based on easy credit, are headed south. I disagree with your statement regarding consumption, because even at zero interest rates ... no credit, no income, no savings ... NO consumption. The government has done it's level best to make it so, but it ain't working. Pelosi's results may differ ... but she's starting to encounter some head winds on her "creating disincentives toward being employed creates jobs" philosophy.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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[No subject] - by Palladin - 03-07-2010, 09:34 AM
[No subject] - by Gunnen4u - 03-11-2010, 07:27 PM
[No subject] - by John L - 03-11-2010, 08:09 PM
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[No subject] - by jt - 03-12-2010, 04:20 PM
[No subject] - by Fredledingue - 03-13-2010, 03:18 PM
[No subject] - by John L - 06-03-2010, 04:27 PM
[No subject] - by jt - 06-03-2010, 06:07 PM
[No subject] - by John L - 06-03-2010, 06:58 PM
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[No subject] - by Palladin - 06-03-2010, 07:18 PM
[No subject] - by Fredledingue - 06-06-2010, 05:15 PM
[No subject] - by TheMan - 06-07-2010, 03:40 AM
[No subject] - by WmLambert - 06-08-2010, 08:16 PM
[No subject] - by jt - 06-09-2010, 05:15 PM
[No subject] - by mr_yak - 06-27-2010, 02:34 PM
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[No subject] - by WmLambert - 06-27-2010, 03:58 PM
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[No subject] - by John L - 06-27-2010, 06:47 PM
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[No subject] - by John L - 06-28-2010, 12:04 PM
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[No subject] - by John L - 06-28-2010, 03:31 PM
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[No subject] - by Huh...What? - 07-08-2010, 07:52 PM
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[No subject] - by Huh...What? - 07-09-2010, 11:34 AM
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[No subject] - by John L - 08-05-2010, 12:36 AM
[No subject] - by mv - 08-05-2010, 01:05 AM
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[No subject] - by WmLambert - 08-05-2010, 01:29 PM
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[No subject] - by John L - 09-27-2010, 01:38 PM
[No subject] - by John L - 10-13-2010, 03:51 PM
[No subject] - by John L - 10-25-2010, 06:09 PM
[No subject] - by John L - 10-25-2010, 06:09 PM
[No subject] - by mr_yak - 10-26-2010, 12:38 AM
[No subject] - by mr_yak - 10-26-2010, 12:38 AM
[No subject] - by John L - 10-26-2010, 01:36 AM
[No subject] - by John L - 10-26-2010, 01:36 AM
[No subject] - by Brooklyn - 10-26-2010, 01:04 PM
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[No subject] - by John L - 10-26-2010, 01:18 PM
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[No subject] - by mr_yak - 10-26-2010, 11:11 PM
[No subject] - by quadrat - 10-29-2010, 09:26 PM
[No subject] - by John L - 11-24-2010, 04:00 PM
[No subject] - by John L - 12-08-2010, 08:35 PM
[No subject] - by jt - 12-09-2010, 07:04 PM
[No subject] - by John L - 12-09-2010, 08:22 PM
[No subject] - by John L - 01-31-2011, 10:44 AM
[No subject] - by WmLambert - 01-31-2011, 12:39 PM
[No subject] - by John L - 04-15-2011, 04:38 PM
[No subject] - by John L - 04-15-2011, 04:38 PM
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