It’s the Saving Rate, Stupid

Fun rant from my amigo Keith McCullough at Research Edge this morning. Here’s the opening:

"Anything that we can do to raise personal savings is very much in the interest of this country."
-Alan Greenspan

This Greenspan quote remains one of the great hypocrisies of modern day monetary policy. Issue your aging citizenry a rate of return on their hard earned savings of ZERO, and tell them to keep on saving…

If Bill Clinton was today’s President of the United States of America and he was staring at these abysmal political approval ratings he would smack He Who Sees No Bubbles (Bernanke) upside the head and say, ‘It’s the Savings Rate, Stupid.’

If Clinton was Japanese, he’d probably smack Shirakawa upside the head too. This morning we are seeing Japan’s latest Prime Minister, Hatoyama, sign off on Japan’s 4th government stimulus in a row while his approval rating hits a new low of 59% (decelerating ever since his election). People are numb to these TRILLION Yen government handouts that have negative economic multiplier effects. Aging populations want a rate of return on their fixed incomes. It’s The Savings Rate, Stupid.