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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: macavity who wrote (41163)	11/10/2003 9:40:42 PM
From: Mark Adams	Respond to of 74559

BTW; While the marginal propensity to save is an important factor in looking at the macro picture, at least some geeks put the current USA 'propensity to spend' at 97 cents/dollar, or higher. If this is accurate (and I have some foundation for speculating US savings are understated) then in the US at least, the propensity to save is a marginal factor which might be ignored in first order guesstimates. You might say my obsession with the whole topic is much ado about nothing. Unless you look at the global environment, which contains asian actors with much higher savings rates and cummulative savings, or play over time the scenario the changing demographics and the related savings fluctuations. Even the disgorgement of the reported 10-11 trillion USD equivalent accumulated Japanese savings would absorb a mere year of US GDP, and it is highly unlikely that they would spend their entire hoard in one year. Dissavings rates (without having digested the OECD reports on the subject yet) would be unlikely to exceed 10%, IMO. Important at the margin, but perhaps not a dominating factor. I suppose, where I am trying to go with this, is the ratio of OECD accumulated savings to OECD debt. I would like to confirm or deny the rumours of a shortage of 'safe' debt for industrial boomers retirement savings. And perhaps better understand the potential impact of a high savings rate cohort such as the chinese on the global debt markets.