See? There you go with that "no savings" spiel that seems to pervade the bear psyche. It just isn't the case. One has only to look at money market accounts, 401Ks/IRAs, or even real estate investments (as my father has for monthly income).
WHY IS THERE SUCH A LARGE TRADE DECIFIT THEN????? Anecdotally, sure, there are people who have money in 401Ks/IRAs and other strait jacket investing programs, but the bottom line is that on the aggregate, the US is a net consumer, not a net saver. The US is a nation of credit card junkies.
The rest of the world is buying US stocks and bonds because they HAVE to. You see, when there is a current account deficit as there is in the US, that means the capital account has to be a surplus, i.e. foreigners are buying US stocks, bonds, and other assets. And everyone knows how gigantic the US trade deficit is, leading to a gigantic capital account surplus.
You are just not looking at the big picture here. BTW, did you ever think about baby boomer retirements in another way? If they are going to end up saving more money to buy stocks and sock away for retirement, they'll have less money to spend on consumer goods, thus lowering the profits of US companies and weakening the fundamentals!
Of course, fundamentals don't matter, its all about money inflows and outflows, right? The massive inflows in Year 2000 sure seem to contradict that theory. |
