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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (96414)	4/13/2009 2:55:53 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 116555

However, there is no NEED to increase demand for assets. If there is a need for anything, it is increased savings. Does that not insure that deflation accelerates? If people are saving, then asset prices are failing, debt is defaulting (monetary destruction) and then we find ourselves in the depths of a liquidity trap. I will be happy to see demand for money remain stable for the moment in order to find some equilibrium. We're already at a 5% saving rate now.. Do we want to go to 40% like the Chinese or Japanese?? Personal savings as a percentage of disposable personal income was 5.0% in January, the highest level since a 5.5% rate in March 1995. The rate was up from 3.9% in December. But then again, maybe you have a preference for our economy being based solely on cash, and no use of credit (which creates money). If that's where you're coming from, then it helps me understand your perspective better, even though I would disagree with it. Hawk