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News Link • Economy - Economics USA

American Spending Goes Into Overdrive As Savings Plunge To 2008 Levels

•, Zero Hedge
 Why save when one can spend (and, more importantly, why save when one has ZIRP)? This appears to have been the motto of American consumers in the past three months when the US Savings rate has plunged from 4.7% in December to a tiny 3.7% in February: the lowest since December 2007′s 2.6%, and just as the recession and the market crash was about to send everyone scrambling for the safety of bank savings. The reason: in February personal spending soared by 0.8% on expectations of a 0.6% rise, while incomes barely rose by 0.2% on a consensus rise of 0.4%. Which means the balance had to be savings funded.

1 Comments in Response to

Comment by Powell Gammill
Entered on:

Goyette discusses this.  It makes no sense to save when both interest is virtually zero AND the unbacked dollar can be both devalued and quickly devalued by putting more into circulation overnight.  So savers are suckers.  You end up with worthless paper value that is worth far less down the road than when y0u could have used it to purchase something tangible.  That is the Federal Reserve in action---ripping you off behind your back.

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