The un-American savings rate: Americans savings rate heads to a record low. Americans saving about 2 percent per year and the near extinct pension.
For a brief period during the height of the recession, Americans resorted to saving more money as credit markets around the world tightened up. As data is now showing, this turned out to be a very brief anomaly in the market. Americans are back to not saving money. The debt markets are creeping back in [...]
The relentless punishment of the American saver. Fed policy has encouraged spendthrift attitude and yield seeking behavior from Americans.
The Federal Reserve has actively pursued a policy that punishes American savers. The drive to push interest rates lower has inflated both the stock market and housing market once again. Yet little of this gain has trickled down into household income for Americans. The primary reason for this is that most Americans do not derive [...]
False prosperity through debt – 4 out of 10 Americans have less than $500. The dangers of building a consumption based nation.
If most Americans had to choose between saving and spending, they would decide to join the spending team. Americans are so drawn to spending that they will even purchase items they cannot afford. Another recent survey found that 40 percent of Americans have less than $500 saved. This aligns with a survey we found last [...]
Starting life in the negative net worth column. What the Fed does not want you to know about American net worth figures.
The reports on American wealth from the Federal Reserve and U.S. Census did not get the press they deserved. You would think that an overall decline of 40 percent for household net worth would get the attention of the press but that might throw a wrench into the consumption machine that they are promoting. Up [...]
Saying goodbye to the middle class concept of retirement – many workers plan to work up until they are 80 well beyond the typical life expectancy of Americans. How long will $25,000 last in retirement?
The romantic concept of being able to retire on a sunny beach with endless drinks is a modern notion largely pushed by mainstream advertising. It is hard for many middle class Americans to imagine a world where retirement is a luxury for the very few. However that is the path we are now following. The [...]
The day of reckoning for global total debt – total credit market debt up from $28 trillion in 2001 to $53 trillion in 2012. US consumer debt went up in last few months but largely because of giant amounts of student loan debt taken on.
You have to really question what passes for financial analysis these days. One financial show was discussing the recent increase in consumer debt as something positive. In the same breath this person also said that households increased savings. Now think about this statement. If you financed a $2,000 vacation on your credit card but increased [...]
The wonder years – over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates?
In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house. The slow infection hibernated for decades until it went into a pandemic. It is troubling to see how the middle class is slowly being dismantled. However there is one silver lining of the home price correction. [...]
The punishment of the American saver – JP Morgan Chase CEO makes 843 times the median household income and pays his Chase customers 0.01 percent on their savings.
The current financial system is designed to punish old school savers. By definition in our debt based economy those who save are actually taking fuel out of the consumption based economy. Spendthrifts are the high octane that keeps things spinning even if it comes with a high debt price tag. You see this occurring in [...]
Middle class annihilation one penny at a time – 64 percent of Americans do not have adequate savings for an unexpected $1,000 expense. The crushing blow to income and household wealth.
The American middle class is furious and this is reflected in how people perceive their failed government but also a financial system that has largely profited from the failures of millions. A recent Gallup poll shows that only 13 percent of Americans actually approve of Congress and the way they are handling their job. This [...]
The Retirement fantasy – middle class Americans are quickly realizing that a secure retirement future may only be a myth. Stagnant income, debt illusion, and the future outlook for working Americans.
Americans are having a tougher time finding extra disposable income to save and create wealth. It is hard to plan for the future when you are worrying about having enough money to purchase a couple of frozen meals. When looking at overall statistics we rarely get a glimpse at how tough things have become for [...]