September 8, 2014
THE SAVINGEST PEOPLE EVER:
Americans are sitting on lots of cash. (John Aziz, 9/08/14, The Week)
Which is one of the main indicators that this is a deflationary epoch.A new paper by Yi Wen and Maria A. Arias published by the Federal Reserve Bank of St. Louis correctly fingers cash hoarding as one of the major culprits, a phenomenon that I've discussed in the past. The U.S. has a savings glut, which means that consumers, business, and banks are sitting on their money instead of spending it.The paper notes that banks have put away close to $2.8 trillion in reserves, and that households are sitting on $2.15 trillion in savings, which is nearly a 50 percent increase over the past five years. That's in addition to the $2 trillion that corporations are hoarding.
Posted by Orrin Judd at September 8, 2014 6:57 PM
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