Keynesian Knightmare: US Savers Outnumber Spenders By Record Numbers

Tyler Durden's picture




 

"Janet, we have a problem," is the resoundingly loud message from the latest Gallup poll of Americans preference (and relative enjoyment) of "saving" vs. "spending". It seems, despite all the hoop-la and exuberance about an 'economic recovery' that is pent-up due to weather but about to break out to escape velocity, the majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans' preferences in 2001. How long before a discussion of negative rates re-appears as the rich and powerful Oz-ians contemplate the latest effort to 'change' people's mass psychology...

 

 

As Gallup concludes, while this question does not measure actual spending or saving, it provides important insight into the psychology of the American consumer's approach to money.

At this point, the trend suggests that Americans have shifted their mindset significantly more toward the view that saving is the more enjoyable behavior, not spending.

Reality 1 - 0 Fed/Keynes

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Mon, 04/21/2014 - 13:35 | 4680058 NDXTrader
NDXTrader's picture

What a worthless poll. Of course, most people would like to be a "saver". But what they say and what they do are entirely different things. They may as well have asked "Would you rather be handsome or not handsome?"

Mon, 04/21/2014 - 13:37 | 4680074 Osmium
Osmium's picture

I have to agree.  Seems to be a large portion of the population just scraping by.  Not sure how they would have anything left over to save?

Mon, 04/21/2014 - 13:38 | 4680075 i_call_you_my_base
i_call_you_my_base's picture

They are referring to their coin jars.

Mon, 04/21/2014 - 13:46 | 4680104 Shocker
Shocker's picture

People are making less, so they don't feel like they can spend like that used it.

They are just getting by with what they have.

Job Situation: http://www.dailyjobcuts.com

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Mon, 04/21/2014 - 13:49 | 4680124 quintago
quintago's picture

Are they running out of shit to buy?

Mon, 04/21/2014 - 14:03 | 4680167 dontgoforit
dontgoforit's picture

Well, sort of.  The missus and I were talking about this just yesterday.  We have everything we want.  We are making a lot less money, but only the last one in college (finishes next month) and the grand kids keep us buying anything at all except for presents.  Yes; we are very thankful for our blessings, but yeah, we both went to school and worked our butts off to get to this point.  Retirement is 3 years away at 67.  We're ready. 

So, yeah - not spending as much because we don't really need anything.  It's a good place to be.

Mon, 04/21/2014 - 14:41 | 4680304 daxtonbrown
daxtonbrown's picture

I am a serial entrepreneur. Some successes, lot of smaller failures, over all did better than ok.
Still have three startups going. I ain't spending shit. I will hire no one because of Obamacare. Robotizing everything I can. I am literally using dirt for some production.
I suspect most people are doing some variation of the same, downsizing expenses, saving for inevitable disaster, jumping off the musical chairs. Fuck the bureaucrats, politicians and bankers. Homey don't play that game no more.

Mon, 04/21/2014 - 19:41 | 4681163 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"I suspect most people are doing some variation of the same..."~

I'm saving all I can, truth be told. But like a lot of ZHers, I have the damnest luck with boats and whatever PMs I buy. You'd figure I'd learn, but nope, the shit just keeps either falling overboard or simply going down every time these watercraft pops a leak.

Seriously, I have a dandy project sitting in the wings, but I'll be damned if I'm going to start it with the way the Rule of Law has taken a shit. I can wait. And in November, I can vote.

Mon, 04/21/2014 - 14:04 | 4680174 asteroids
asteroids's picture

No, they are turning more Japanese. Amerika is going down the road the Japanese have followed. Nothing can defeat demographics. Not even the FED.

Mon, 04/21/2014 - 16:21 | 4680628 mickeyman
mickeyman's picture

Time for negative nominal interest rates

Mon, 04/21/2014 - 15:27 | 4680477 mrdenis
mrdenis's picture

I'm wrapping pennies

Mon, 04/21/2014 - 16:22 | 4680630 mickeyman
mickeyman's picture

Or they could force you to keep the coins in your home if you're a saver and make the coinage out of radioactive materials!

Mon, 04/21/2014 - 14:30 | 4680253 alangreedspank
alangreedspank's picture

If they got rid of the McMansion and the extra (new) car in the driveway, they could save.

Mon, 04/21/2014 - 14:43 | 4680315 post turtle saver
post turtle saver's picture

sorry moron who downvoted this, but alangreedspank is absolutely correct... there's owning a place to live and driving a reasonable car, then there's McMansions and spinners and other "house poor / hood rich" types

Mon, 04/21/2014 - 15:03 | 4680392 headhunt
headhunt's picture

and if the government would do something crazy like cut back on their budgets - like most Americans do to pay the ever increasing taxes - to pay the ever increasing budgets.

Mon, 04/21/2014 - 17:21 | 4680814 Monty Burns
Monty Burns's picture

It's counter-intuitive I know but savings actually do go up during recessions.  Presumably it's the fear factor.

Mon, 04/21/2014 - 18:25 | 4681004 Firepower
Firepower's picture

MUST have a third data point: Credit card debt.

Don't mean squat if respondents "say" they LURV Teh Savings" and have $30,000 in the bank but put $56,000 per year on the VISA

https://eradica.wordpress.com/

Mon, 04/21/2014 - 14:11 | 4680193 NotApplicable
NotApplicable's picture

If the poll were as worthless as you posit, it would be two flat lines, one at zero, one at one hundred. Instead though, what it shows is the marginal propensity to consume vs. marginal propensity to save. Which is nothing more than a question of time-preference, which can also be stated, "how comfortable are you with your current level of savings?"

If someone feels they have plenty of savings, then they feel less satisfaction by adding a marginal dollar to savings instead of consuming it. If someone feels like they don't have enough savings, then they feel more satisfaction by increasing their savings rather than consuming it (in general that is, given every purchase has its own unique value to the purchaser).

So, this poll quite accurately displays that people do not feel comfortable consuming scarce assets in this economy. Which, of course, is a good thing (regardless of the Keynesian Cult's view), as it shows people are properly observing the direction of the future (regardless of the MSM spin), even though they may not have a clue as to why.

Mon, 04/21/2014 - 14:32 | 4680259 sessinpo
sessinpo's picture

NotApplicable   If the poll were as worthless as you posit, it would be two flat lines, one at zero, one at one hundred. Instead though, what it shows is the marginal propensity to consume vs. marginal propensity to save.

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This is an opinion poll, not an action poll.

As money.cnn indicates, an astounding 76% of Americans are living paycheck to paycheck, thus they aren't saving. But I imagine many of those would enjoy saving more then spending if they had the disposable income.

http://money.cnn.com/2013/06/24/pf/emergency-savings/ 76% of Americans are living paycheck to paycheck

It is really a ridiculous poll.  You say "If someone feels they have plenty of savings, then they feel less satisfaction by adding a marginal dollar to savings instead of consuming it." But if they have no disposable income, they have limited choices in this matter and thus it changes the opinion poll results.

For example, if I am paycheck to paycheck and cash poor, then I would prefer savings until I feel more secure to do spending on extra things.

Mon, 04/21/2014 - 14:52 | 4680357 Catullus
Catullus's picture

Opinion polls aren't actual polls? They're not actually polling opinions?

It's pretty straight forward. Those polled said they'd prefer to save than spend by a 2:1 ratio.

Whether they actual do or can has nothing to do with it. And even more to the point, even has people's incomes have been declining on a real basis over the past decade and interest rates are the lowest in human history, the trend has been that more people respond that they prefer to save.

What it destroys is the Keynesian myth that they can manipulate interest rates to near zero to encourage spending. Or that it will engerize "animal spirits" by consumers to spend out of recession

Mon, 04/21/2014 - 16:26 | 4680647 ArkansasAngie
ArkansasAngie's picture

Personally ... damn both supply siders and "demand siders".

efficient market?

There are no free markets.

Mon, 04/21/2014 - 14:59 | 4680380 headhunt
headhunt's picture

yeah but "Would you rather be handsome or not handsome?"

Mon, 04/21/2014 - 15:26 | 4680470 DosZap
DosZap's picture

http://www.latimes.com/business/la-fi-adults-in-parents-home-20140421,0,2293806.story#ixzz2zXcacB4r

 

Yeah, this is the NEW economic BOOM!!!!!!!!.With results lke this, I hope it doesn't get  MUCH better!.

Mon, 04/21/2014 - 16:17 | 4680616 czardas
czardas's picture

NDXT Trader,  More to the point, no amount is asked.  Are they saving $10/mth, $25/mth or $200/mth?  Are they saving for retirement or to buy a goody because their cards are maxed?  Another feel good poll.   If folks were saving there would not be a retirement crisis. 

Mon, 04/21/2014 - 17:11 | 4680740 JuliaS
JuliaS's picture

In a fiat economy there are 2 directions:

Inflation - prices growing faster than wages.

Deflation - wages falling faster than prices.

Casino always wins.

Savers don't scare the Fed. The bank can dilute money right out of your pocket. It's beneficial to them that you produce goods supply services and carry redemption well into the future. That way they can consume today and leave you empty-handed tomorrow. IOFU.

With a fiat-controlling central bank it is impossible for them to be at a disadvantage.

You save (meaning you produce but don't consume equally) - they'll rob your term deposits, pension funds and social security in order to consume on your behalf.

You go into debt (meaning you consume in excess of production, but plan to make up for it later) - they burden you with interest, demanding you do twice the work later for evey unit of consumption.

You borrow and default strategically (you consume never planning to produce) - the economy takes a hit, and they print more money to get it going again. They dilute money out of everyone's pocket to plug up the hole in yours and since all of that fiat comes into existence as same good'ole debt issued to government, then everybody is forced to work twice for every unit of your consumption.

Meanwhile they skim off the top regardless of the market direction.

There is only one Keynesian nightmare. It's called "Barter", but thanks to the cleverly crafted IRS code, you're required to produce fiat denominated taxes even on transactions never involving fiat. Supposedly the Fed charges us a fee for "renting" the dollars and that argument should go out the window when dealing with barter... but... they've got guns. And when they've got guns, they may tax you because your hair is brown and it's Tuesday for all we know. Doesn't really matter what excuses they make. Guns speak louder than words and we're a nation of cowards. It's as simple as that.

Mon, 04/21/2014 - 13:35 | 4680059 i_call_you_my_base
i_call_you_my_base's picture

That's why you have to give rich people more money. They have to spend five times as much to counteract the savers.

Mon, 04/21/2014 - 13:38 | 4680083 Mr Pink
Mr Pink's picture

Hope they aren't "saving" it in fiatscos

Mon, 04/21/2014 - 14:11 | 4680199 NotApplicable
NotApplicable's picture

For the best ROI, they bundle it up and hand it off to Corzine.

Mon, 04/21/2014 - 14:34 | 4680265 Greenskeeper_Carl
Greenskeeper_Carl's picture

im not, just a little cash, to cover a couple months bills if need be, everything else goes into gold/silver. But if I am looked at through the lens that is typically used to determine f I am a saver or not, IE how much i keep in those types of accounts, it looks as though i spend everything I have and am entirely pay check to pay check

Mon, 04/21/2014 - 13:35 | 4680062 GOSPLAN HERO
GOSPLAN HERO's picture

Eat that Chas Caldwell.

Mon, 04/21/2014 - 13:39 | 4680078 GOSPLAN HERO
GOSPLAN HERO's picture

That's "Chas fucking Caldwell" the MarketWatch troll.

Mon, 04/21/2014 - 13:36 | 4680064 FieldingMellish
FieldingMellish's picture

Don't forget, in New Normal speak... not spending or spending less (of what you don't actually have anyways) = saving

Mon, 04/21/2014 - 17:25 | 4680821 JuliaS
JuliaS's picture

Don't hoard your breath.

Mon, 04/21/2014 - 13:36 | 4680066 Apocalicious
Apocalicious's picture

This chart accurately captures the stupidity, laziness or both of the American people, since their actual behavior differs from their stated preferences by 180 degrees. 

Mon, 04/21/2014 - 13:37 | 4680067 hobopants
hobopants's picture

Saving fiat is like saving left overs, it starts to go bad after a few days.

Mon, 04/21/2014 - 13:54 | 4680146 NotApplicable
NotApplicable's picture

I'm always correcting people who mention they're "saving dollars," pointing out that it is absolutley impossible if you're talking about saving purchasing power over time.

Which of course, is why the chart above looks as it does. People would love to be able to save, if it were only possible.

Mon, 04/21/2014 - 13:37 | 4680071 agstacks
agstacks's picture

Domestic Terrorists save money. Patriotic Amerikans spend it. 

Mon, 04/21/2014 - 14:25 | 4680240 Winston of Oceania
Winston of Oceania's picture

Brewing your own beer and growing vegetables is now an act of domestic terror! -The dude with a phone and a pen

Mon, 04/21/2014 - 13:37 | 4680072 IridiumRebel
IridiumRebel's picture

We need a fucking bail in to right this atrocity.

Mon, 04/21/2014 - 13:38 | 4680080 101 years and c...
101 years and counting's picture

the fed has an answer for that:  inflation in food, energy and rent.  problem solved (for the keynes loving fuckbags).

Mon, 04/21/2014 - 13:41 | 4680091 qazwsx
qazwsx's picture

Saving with 0% interest is retarded... people must be getting desperate, gotta save to buy a pound of beef now!

Mon, 04/21/2014 - 14:13 | 4680203 NotApplicable
NotApplicable's picture

Still beats the negative interest rates we're getting now!

Mon, 04/21/2014 - 13:41 | 4680092 Seasmoke
Seasmoke's picture

Damn right I am a saver !!!!...............all my "savings" are going towards gas, electric and food

Mon, 04/21/2014 - 13:54 | 4680144 1stepcloser
1stepcloser's picture

hence ur a renter in the end!

Mon, 04/21/2014 - 13:58 | 4680159 NotApplicable
NotApplicable's picture

I save money when I pay down my Visa balance.

TADA!

Mon, 04/21/2014 - 14:22 | 4680236 Winston of Oceania
Winston of Oceania's picture

Starving banksters are we? Let me zee your paperz consumer!

Mon, 04/21/2014 - 14:37 | 4680280 sessinpo
sessinpo's picture

NotApplicable       I save money when I pay down my Visa balance.

   -----

Winston of Oceania         Starving banksters are we? Let me zee your paperz consumer!

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NotApplicable is okay. Just having a visa puts you in the machine .. No papers neccessary. They got him/her.

Mon, 04/21/2014 - 14:56 | 4680374 headhunt
headhunt's picture

According to a friend of mine, you save money buying shit on sale and then paying down your Visa

Mon, 04/21/2014 - 14:52 | 4680356 headhunt
headhunt's picture

Damn Bush and his oil buddies.

Mon, 04/21/2014 - 13:43 | 4680100 novictim
novictim's picture

It's all roses...until you realize that the massive "savings" is by the top 0.1% of the US public.  

The bottom 96% are broke and are 1-3 paychecks away from ruin.

The fatal trend of wealth inequality is not good for anyone.  It is UNNATURAL, it is toxic to our democracy, and it will lead to both a financial disaster and if not currected, a violent revolution.

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BTW: Blaming Keynes, the economic policy not seen since the 1960s,  on the fact that the Ultra-wealthy are taking home all the economic gains , gains that otherwise would be used for consumer spending, is like blaming a rape victim for not using a condom.

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