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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 409.23

-1.0%

Jan 7 4:00 PM EST

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To: John Vosilla who wrote (113843)	10/18/2015 12:29:10 AM
From: Elroy Jetson	Read Replies (1) of 219110

The majority of the "zero savings" crowd are "home owners" paying far more than rental costs to live in their bank-owned home. While these folks technically have no savings account, they have access to credit when they want money, so they're not the penniless waifs those outside the Fed picture. The Fed survey of savings accounts exclude retirement accounts and other non-cash assets like stocks, bonds and home equity. When you can earn at most 1% on a CD and the interest rate on your mortgage is 3.5%, mortgage-style home ownership is a built-in disincentive to save money in the traditional sense. Home mortgages supported by significant tax incentives for real estate ownership have created their own logic. This is the primary reason central banks are not overly concerned that near-zero interest rates have created bubbles in financial assets like homes, stock and bonds - because that bubble gets spent by many, creating income. You could easily describe the very low rates of saving as evidence of the success the credit system has achieved in increasing monetary velocity.

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