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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Bill Ounce who wrote (1393)	3/15/1999 5:51:00 PM
From: Paul Berliner	Read Replies (1) of 3536

Bill, Thread - RE: Boomers are poor savers. Although I'm bearish on the economy, I am flabbergasted as to how many economists, including AG himself, have yapped continuously about the 'savings rate' going to zero and even being negative. This is supposedly derived from measurements of savings deposit growth (including M1 I presume). Anyway, the general public is saving money - a great deal infact - but it is not measured by the Fed. John Q Public has money taken from his check each pay period and stuffed into a 401K or similar vehicle. He is spending like mad because the 401K is growing rapidly in this glorious bull market. The fact that he chooses not to buy a lame 5.05% CD at Ye olde Bancorp is irrelevent when calculating how much is being saved - the only difference this era is that the savings are going into riskier areas than in the past. Maybe the Fed should just calculate how much in principal (not referring to appreciation) has been contributed to 401Ks in the past year and then decide whether the savings rate is really negative (it wouldn't be). Ultimately, and to borrow from the president, 'It all depends on what your definition of Saving is.' Paul

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