Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (603)	12/14/2000 4:17:47 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

What is the purpose for savings?

To: Ahda who wrote (603)	12/14/2000 4:44:46 PM
From: GraceZ	Read Replies (2) \| Respond to of 24758

there has been no other period in history to my knowledge where consumer debt could at the rate it increases (thanks to credit cards) out do corporate sector. You have to understand that here in the US we have been moving to an acceptance of electronic payment away from paying with cash and checks. Many people use credit cards to pay for almost everything simply because it keeps them from having to keep track of cash expenses and they prefer the convenience. I know I carry very little cash and I charge almost everything I buy, yet I carry over no personal credit card debt. This is not to say that huge numbers of people haven't allowed their debt situation to get completely out of hand, but you have to balance that against the rising number of people who simply use their cards for convenience with the added plus of the twenty-five to thirty day float. Savings rate is hard to get a handle on primarily because people have chosen to move out of the traditional savings vehicles into money market funds, investments and retirement accounts which (as far as I know) are not counted in the savings rate. If you think a high savings rate is necessary for a robust economy you need not look any further than Japan, which has a very high savings rate.....yet their economy is suffering from a 10 year slump. People will borrow money when they can get a better return investing in something than the interest rate minus inflation. This is the criteria that I use when I decide to borrow money in my business. My return has to beat the real cost of borrowing and by a decent enough amount to pay the taxes on the gain. I've been retiring debt in my business for the last year, primarily because I get a better return doing that then by investing in new equipment at this point. People are jumping through hoops to try to lend me money right now offering far below market rates, which tells me that borrowing is soft.