Guest Post: Personal Incomes & The Decline Of The American Saver

Tyler Durden's picture

Submitted by Lance Roberts of StreetTalkLive,


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
lolmao500's picture

And there's no inflation, Ben told me... And IF there is inflation and that is a big IF... Inflation is good! Ask any Obamabot out there. If there's no inflation then it's deflation and a depression! Let the fed rob you and be happy about it! That's what good Americans do!

clara-to-market's picture

What we have is the beginning of a feudal economy.

Scary stuff.

No shit.

fourchan's picture

4.00 gas this summer, go short consumers.

SafelyGraze's picture

when the american saver dis-saves (removes money from the bank), the situation in the 1930s is recreated

although, in the 30s, people dis-saved notes from an account and saved the physical in caches

now, people dis-save notes from an account and spend them on debt service and horsemeat

still, a bank run is a bank run as long as everybody's pulling out their notes. whatever the reason.

good thing there's a central bank to serve as a lender of last resort for solvent, but illiquid, banks

Law97's picture

Good thing the stock market doesn't need consumers.

arkady's picture

Deregulation is responsible for more credit?  Really?  This is the kind of stuff that the Left loves to cling on to as if is somehow writing more sophisticated regulation can prevent Joe Consumer from borrowing as the Fed prints like a lunatic.   Gimme a break.


Yes it did change in the 1980s, there is a massive cyclical downturn in rates to keep the Greenspan new economy frmo chugging along - has precious little to do with regulation.   

Otherwise I do like the charts and a visual reminder of what we already know.   We are being fleeced. 

GMadScientist's picture

"Deregulation is responsible for more credit?  Really?"

Yeah, really. Why do you think they had such a hard-on for getting rid of Glass-Steagall and insuring that derivatives were not regulated?

What else happened in the 80s? Does the name "Silverado" mean anything to you? How about Garn-St Germain?

Explain how you'd end fractional reserve banking without having any regulations on the books.

You "conservative" chuckleheads sure are an amusing lot of Stockholm syndrome sufferers.

arkady's picture

Anyone who thinks G-S was a good piece of legislation is beyond help.  Why don't you go ahead and slap never ending band-aids on top of state sponsored/backed banks and see what happens.  Oh wait, we already did - perhaps that is why we are imploding.


You end fractional lending by letting banks go under when they pyramid and make money a private issued concept instead of that sponsored by the Gov't.  It has been discussed extensively.  


Nothing more amusing than you lefties insult us, while screeching that we need more and more regulation.   How about letting the market do its job, nope, you won't stop until you centrally plan everything to death.

tawdzilla's picture

what is this concept "savings?"...never heard of it

Harbanger's picture

Savings is a reduction in the amount of money you borrow.  At least that's the definition of savings according to our benevolent leaders.

Vincent Vega's picture

I just sent in my 2012 income tax. I am a K1 (general partner) so I get hit for both sides of SSI. My partners and I pay ourselves a monthly salary and bonus out profits at year end. Basically, the way I look at it, what I earn from Jan 1st until May 15th goes to Uncle Sam. Far and away the single largest monthly expense that I have is tax....far larger than all my other expenses combined. 

This article seems to sugest that savings rates must rise for the economy to grow. Perhaps that is a valid point. But for me personally, I will not be putting money in to the economy until I can keep more of what I earn.

Harbanger's picture

It's the new normal in Amerika, tax the rich (aka. business owners) until they go broke.  The socialists count your money like the 3 stooges did.  3 for you.... 1,2,3 for me.

optimator's picture

Do you and your partners have company cars for your business use that are, of course, garaged at home to be safe?   Do you entertain for your business?  Do you have meetings away from your officer, such as Hawaii?

spdrdr's picture

Your point being?

Spit it out, and let's debate.  It's Fight Club, you know...



Vincent Vega's picture

No. We are a very small business (5 people). No company cars. No business trips. No entertainment. We are a very specialized boutique, per se. We don't even advertise. As I stated in my original post: We pay ourselves a monthly salary and at the end of the year we divide the profit and pay it out as bonus. It is very staightforward and simple. 

btw.....I live about eight miles from the office and I bike to work as often as weather allows. I drive a 2005 car. I brown bag my lunch. Any more snarky comments or questions?

Seasmoke's picture

save for what ???

Blotsky's picture

cognitive dissonance.

lolmao500's picture

Hookers and blow obviously!

I am more equal than others's picture

Hookers underperform and blow overrated.  Now the Ipad12, I'm saving up and standing in line at the Apple store now.  Damn, it cold here in Cleveland.....

bunnyswanson's picture

A rainy day.

Purple Rain baby - mandatory bitchez!  Soak it up! Prince

davidsmith's picture

The next phase commences when middle income Americans do the math and come to the conclusion that the United States Government is out to kill them.  Then they will overthrow the government, as Blondie would say, "Not a minute too soon."

PeeramidIdeologies's picture

So just to clarify, the government is an individual entity? I was always under the impression that they were bought and payed for, on the federal level, by big bis, and corps., and then on the state level by local interests and who ever else can afford kick backs, err I mean contributions.
If we're going to start hanging signs around people's necks lets make sure we get the facts strait...

oddjob's picture

Record ASE sales?, people are saving, just not in narcobux.

cynicalskeptic's picture

When you get 0.01% in interest on paper $ savings  - with REAL inflation running at 3 times the 'official goal' of 2%, there is absolutely NO incentive to SAVE. 

Hell... you're best off getting as far in debt as possible.  

I'm thinking it might not be a bad idea to mortgage yourself to the hilt (IF you can get anyone to loan you any $) convert the $ to hard assets, bury them and find a nice cave to hide in for the next decade.   Might not even have to pay back the $ if the melt down is bad enough - otherwise cash in a fraction of the hard assets to pay off the debt and then go pick up some property and other hard assets on the cheap 

optimator's picture

And that's exactly what Benny Boy wants you to do, buy it now before the price goes up again, it'll fuel the economy.

newworldorder's picture

Where to start? For the statistically inclined - I have no "data" but here are some comments.

- There has to be real income generated in order to save wealth. Current single family earners, and workers in their 20's, 30's and even 40's find it difficult to save. Most spend what they earn. Without saved income you cannot invest.

- Double earning families where couples can earn 100k plus a year may start to save. Under that number, most fall into the same spend as your earn youth category.

- Probability of job loss for one family member is much higher than previous generations. These job losses are often at the "whim" of corporations and last a long time, wiping out savings.

- Workers for the most part have to fund their own retirements - 401k, IRA, etc. Traditional pensions have been reduced or are mostly gone.

- Education costs have gone through "through the roof."


Boomers may be the last generation to experience the concept of savings for a "rainy day." The generations after them are essentially spending what they make. The poor and the jobless have been confined to a subsistence lifestyle of poverty level government assistance with no hope of getting out of it.


These are the standards we have today. Given the current state fo spending, debt, US and world economies, it will be a slow grind to provide improvements. We need a lot of economic growth and a sudden improvement in the unproductive portion of our population.


The "half full glass" scenario says, long term maybe. The "half empty glass" scenario says, we don't have a chance of the downward spiral reversing.

The Heart's picture

"The "half full glass" scenario says, long term maybe. The "half empty glass" scenario says, we don't have a chance of the downward spiral reversing."

Thank you.

But what if the babylonians stopped spending all the money they do to maintain and supply over 900 military bases all over the world, and also stopped supporting those host countries with free money for them to buy weapons from those who paid off the govt shills to continue the endless war for profits charade?


cynicalskeptic's picture

The problem is that SAVING is asking to get punished.  

We did what you were supposed to do.  Waited to have kids, saved for heir education, aved up and worked hard to buy a house, have lived below our means.  We also got lucky via a decent employer who actually believed in sharing profits with employees.


We ended up paying full freight for our kids college (they'll get out without any debt but DAMN, we could've saved a fortune by NOT having any money put aside and going for financial aid). 

The taxes on our house have more than tripled - and are now way more than the mortgage payments.  Why buy a wreck and fix it up?  

Our retiremnet savings are not even keeping pace with inflation and may get confiscated anyway.  Why save since we'll probably drop dead from overwork not long after hitting 65.

As for saving - there are NO safe places to invest (even Au and Ag are subject to govt's whims) and it seems like most 'investments' are simply schemes to take what you have saved.

We're well off enough to pay the absolute MAXIMUM in taxes - while the really well off pay accountants and attorneys and pay far less percentage wise (and even amount wise) than we do.  


Would've been far easier to work less and sleaze by - wouldn't have made much of a differnce financially.  And THAT is the bigger problem.  

You're PUNISHED for working hard, saving and living withing your means keeping debt to a minimum. 

Dalmatian's picture

I know exactly what you mean CynicalSkeptic!  I waited and waited to have kids until I felt financially ahead, and the day never came - I can no longer have kids without medical intervention, and I'm not paying for IVF treatments.  A couple months ago I pulled out 60,000 dollars out of the stock market to pay off my mortgage - that felt good to pay stupid BofA off!  And it felt good to pull that money out of the artificaially inflated market too.

I'm in your position...I don't know what to do with my extra cash.  I have 12,000 dollars in my checking acct. just sitting there.  I suppose it's good to have emergency cash, but it aint working for me either' it's not growing...  I was thinking when the market collapses badly to throw in this cash.  It could be this year or next.  If it's next year I may have 20,000 dollars saved up to throw in the market.  Think it's a good idea?

overmedicatedundersexed's picture

dal, cash in a checking account? take it out and save it at home, 20,000 to invest buy gold or silver..advice not to get rich just to keep what you got, trusting your bank is like a frog asking a snake whats for dinner.

Dalmatian's picture


But will there really be a need for gold and silver later?  I know these assets are probably the best bet, but the cash is good to have in case of emergency too; cash is king - like they say. 

If I do buy bars of gold and silver do I stack them in my basement?  Plus, isn't gold really high in price right now?  I don't want to buy when things are high.

Should I pull out my money out of checking acct. and just hide the 12,000 dollars in envelopes in my house somewhere?

If I sound dumb, please don't bash me...these are real questions I have though. 

How about the stock market in Canada?  Maybe put money there?  I wish I had a lot more cash so I can buy a chunk of farmland....

overmedicatedundersexed's picture

dal, with what liquidity you stated you have, I stand by what I do and what I advised..the question of a need for gold and silver is some what a time in history when gold or silver did not retain value. the amount of money you are talking your stacking of gold or silver is not a problem a shoe box will be too big. Yes on checking I only leave what is needed to cover monthly bills, and yes put the money in the shoe box with your PM's it all will fit.

one thing you must understand your part of the national debt makes what little you have much less..sad but we are all in it, FRN's are debt not money.

Lordflin's picture

Overmed is correct... No exposure to the banks beyond what is necessary... Silver is cheap now... Could get a bit cheaper, but not much . Problem is that you will pay a stiff premium... More for some forms, such as Eagles, less for others such as bars... Junk silver, US silver coins minted before 1965, use to go for spot, but they are becoming harder to find.

Dalmatian's picture


Where do I buy silver bars?  And in the future, where do I sell them if I want the cash or want the profit?  You obviously wouldn't sell them just anywhere where the place takes a big cut themselves; like those stupid Cash for Gold places.

Lordflin's picture

I personally have dealt with Gainsville Coins for years... Found their prices competitive and their delivery good... Another ZH poster seemed to prefer Provident Metals... I have not taken a look at them, but would suggest you do a comparison. As to reselling... I would not by physical to trade... Not any time soon... You will always get clipped on the premium... Metals traders make their profit on the spread. If you need to sell look for reputable bullion dealers in your area... Investigate anyone you do business with... There are lots of ripoffs and fly by nights.

PMs are a store of value... They are an investment only in the sense that 1) many of us believe their value has been artificially suppressed 2) You will still have money when others find the paper they are holding to be worthless... Or something near to worthless. You will also find that more and more folks are willing to barter goods and services for bullion.

Whatever you do stay away from collectables...

Dalmatian's picture


What is wrong US silver coins made berfore 1965?

What about Morgan dollars from the 30s and 40s?

PAWNMAN's picture

Punishing success and rewarding failure. Just another sign that the Empire is dying. I feel your pain brother.

dolph9's picture

If the boom of the 80s and beyond was a phenomenon of improvement from the top down, then the ongoing collapse since 2008 is a phenomenon of impoverishment from the bottom up.

You work, but your money is transferred first to the government and then to whomever the government favors.  You find yourself with less money.  So you cut back on expenditures.  As you cut back on expenditures, businesses raise prices even more and government raises taxes to make up for losses.

It's a no win game.  The solution is real collapse (as in allowing genuine bankruptcy and the unprofitable sectors, cities, and people to die, is unpalatable to the establishment, as their power would also wane).

We are all "paying" for each other now.  We are all supporting each other.  Global financial capitalism has morphed into global socialism with nary a peep.

The solution is to go Galt, but even that has limits.  What are you going to do...move to a cabin without electricity?  How are you going to survive?

Joy on Maui's picture

Yup.   Cynical as it is, this is another version of "If you can't beat them, join them."

bornlastnight's picture

Tyler, if you're trying to piss me did.

alfbell's picture



The downstats (non-producers) are rewarded, the upstats (producers/savers) are punished. That's what's been going on for decades and decades. It is the formula for the collapse of the country, hastened along by government corruption and unworkable "isms" (fascism, socialism, communism, capitalism).

Make a lot of USD while you can... have free and clear income properties and small businesses... own a modest home free and clear (with off the grid and food production potentials)... have some gold and silver... hope for the best and muddle through.

Accounting101's picture

Stop the Galtist bullshit! I am amazed that some of you economic illiterates feel the need to genuflect at the alter of an old Russian hag who was comically inconsequential.

You are all producers and takers! Grow up and stop helping in the destruction our democracy.

overmedicatedundersexed's picture

mr 101  what do you suggest? sending money to any D pol to continue forward?

Accounting101's picture

What the hell does sending money to a D pol have to do with this? Is that what I advocated? Now you are practicing tribal politics and refusing to think about things for longer than two seconds.

If you voted for any of the two party candidates (yes, Paul Ryan is a crony capitalist just like Obama) you helped helped to destroy our democracy. There is no such thing as less government. The conflict is and will always remain about who the government serves.

overmedicatedundersexed's picture

mr not gault acc 101...who the .gov serves you say, so how does withholding economic activity affect that? you need a little explaining, see many here on ZH want to stop feeding the monster in you think we are supporting D OR R then you reading comprehension is lacking..bring yourself up to speed please.

ArmyofOne's picture

Fuck saving.  Its so elitist.



Livin la vida loca,


Party on bitchez



q99x2's picture

Well when you put it like that I'd say its time to start building a bomb shelter.