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Notes to myself, possibly of interest to others.
-- Bill Northlich

Thursday, April 8, 2010

The Rising household savings rate is great, right?

...the rising savings rate ...doesn’t signify more money in people’s wallets; instead, it suggests that consumers are paying off their mounting debt during a period of reduced borrowing...The money is not going under mattresses or into bank accounts, from where it will emerge one day to jump-start the economy. It’s actually subsidizing the previous boom, which was built on debt and the presumption that assets would always cover that debt.
---Eric Jansen, Harvard Business Review

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