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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (37481)	11/24/1998 6:18:00 PM
From: Mike M2	Read Replies (4) \| Respond to of 132070

CB, you may want to look it up but i am guessing that savings is defined as after tax income which is not spent therefore it is saved. What people do with the money ( how they invest it ) is not germane to the fact that the US savings rate ( annaul basis) is the lowest since the Great Depression. It was negative in Sept. 98 . The items you mentioned fall under the category of net assets-a separate issue which must be compared against debt to get net worth. I am sure that you are aware of this stuff i just want to define the terms of the discussion. Many bulls argue that low savings does not matter because of the stock mkt gains ( financial asset inflation) . For the moment the wealth effect of the stk mkt encourages more debt and consumption than would otherwise be the case causing imbalances ( maladjustments) in the economy. I saw a piece in Barron's recently ( David Levy ?) the article concede that there is controversy as to how savings are measure but when any number drops so dramaticly from 5% a few years ago to nil something is wrong. I'd be interested to see what you come up with. IMO many of the arguments dismissing the low savings rate are just bull propaganda. Mike