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 : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (67182)	8/9/2005 2:43:45 PM
From: Moominoid	Read Replies (1) \| Respond to of 74559

To the extent that capital gains in stocks reflect increased corporate value the national accounts record that saving as saving by the firm. Otherwise with for example houses it is just put down to inflation to the extent that it doesn't reflect an improvement (investment in the house). I agree that the personal savings rate is misleading as an idea of the change in real assets of the household sector. Problem is most people don't know how to understand the data. But the savings rate has declined - and there are various good reasons for that - some are policy driven and some are endogenous - an aging population will save less for example, capital accumulation means more inheritance and less need to save to smooth consumption over a lifetime. But you raise an interesting point on corporate saving in overseas locations. Of course if that income is earned overseas it is part of some foreign country's GDP not US GDP but if the profit was repatriated it would be part of US GNP (I'm not sure if it is counted in US GNP even if it remains in the foreign subsidiary). Now a question I have wondered is if those foreign subsidiaries buy US assets with those savings, that is counted as foreign investment into the US? This gets pretty confusing :)