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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: TobagoJack who wrote (67175)8/9/2005 10:27:01 AM
From: Moominoid  Read Replies (1) of 74559
 
I think GM is not a savings machine or but a debt nuke

Yes because they don't make any money.

ompanies do not save, they invest, fail or succeed, distribute if possible, to management mostly

and governments do not save

savings = investment, o

They may or may not save and they may nor may not invest in the economic sense of real investment.

The big profits at the moment are in the financial sector, then energy, a few Microsofts etc. Microsoft is saving if it puts its cash pile into US government bonds, but it isn't then investing.

The net saving in the economy is too low of course to fund the real investment hence the trade deficit.

But the way the US system currently works is that the firms save on behalf of their shareholders who then don't bother (in net) as they ahve those capital gains supposedly in return to show their share of the savings pile.

Anyway that's how I see it. But on SI, mainstream economics isn't very popular :)
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