Country Living Series

Wednesday, September 3, 2014

It's called SAVING

Hey guess what! Don't open a savings account or you could be accused of "hoarding" your money!

Yes that's right. A frugal virtue handed down for centuries is now being vilified by the Federal Reserve. According to this article: "A paper the central bank branch published this week blames the low level of money movement in large part on consumers and their 'willingness to hoard money.' The paper also cites the Fed's own policies as a reason for consumers' unwillingness to spend."


The Feds seem genuinely bewildered that people living in an uncertain economy don't want to blow every last penny on useless consumer items and would rather stash their spare cash in a savings account (or under the mattress for that matter). "So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?" economist Yi Wen and associate Maria A. Arias asked in the St. Louis Fed paper. "The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money." [Emphasis added.]

In days past, this "hoarding" of money would be termed a "savings account" and every child from five years old and up was encouraged to have one. Smart adults socked away (oops, "hoarded") a percentage of their income for rainy days, emergencies, and retirement. But now that's bad! Baaaad!

The unspoken implication, of course, is those greedy evil middle-class Americans who insist that it's wise to have a cash reserve Just In Case are the ones responsible for taking down the economy by "slowing the velocity of money." In case you didn't get the point, the article added, "The reason that inflation hasn't kept up with gains in the money supply simply has been that people are sitting on cash rather than spending it."

Surely it can't be the government's fault that our economy is teetering on the edge of another great depression. No, it's Joe Sixpack's fault for "hoarding" his money. Gosh, how awful.


Folks, I urge you to do your patriotic duty and empty your savings account! Don't be a hoarder, be a spender! Give a single-handed boost to the economy and ensure that you too will face disaster if you lose your job! Wheeeee!

30 comments:

  1. Do what others won't so you can do what others can't.

    I don't hoard enough of my paycheck as I should.

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  2. Sounds reasonable to me! I'm all for spending every single penny I have -- if you believe this, I also have some gorgeous lakefront property in Arizona that I'll sell you real cheap! LOL
    LOVE YOUR NEW HEADER PICTURE!
    Happy Day To You & Yours - Bobbie :)

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  3. I honestly don't understand. Every day, the govt runs public service ads telling us to save and complains that too many people live paycheck to paycheck. Then they complain that people aren't spending.

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    Replies
    1. That's the way it is with liberal-"progressives" (they're about as "progressive" as the plague. We should call them REgressives). Hypocrisy is one of the necessary requirements to being a liberal-progressive. You must also be dishonest, dishonorable, deceiving, intolerant of all who disagree with you, and manipulative. So, to sensible, fair-minded people, what liberal-progressives do never makes any sense. You have to HAVE good sense to make sense!

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    2. The progressive must also master 'doublethink'. The ability to hold in one's mind, two diametrically opposed ideas, as completely true.

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  4. Hi Patrice, Don't blame me for I spend every dime I get my hands on. On beans, bullets and bandaids. And junk silver, feeder calves, weaner pigs, baby fowl and the feed to raise them. And, it's not my fault that I can't deplete my IRA at a quicker pace due to tax rates (just sours me). I know you wrote somewhat tongue-in-cheek, but I spend what I make (less a prudent cushion) and that probably doesn't make them happy either. Yours, Jeff

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  5. The insistence of the federal government to use the term "hoarding" in this report should seriously scare everyone reading this blog.

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    Replies
    1. Amen to that.

      Just Me

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    2. To be fair, the FED is not part of the federal government, so this is not the government speaking. This sounds much like the lingo of a certain kind of economist (that, most likely, is in his mid-twenties, seriously brainwashed by economic theories and has never had to scrimp and save himself).
      Still idiotic, though.

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  6. Financial advice from the federal government is about as sound as the money they print.
    Montana Guy

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  7. Gee and I was going to open a savings account at a local bank, really I was, so I could convert all those rolls of coins to paper money. Our banking is done on line - direct deposit, mortgage, bill pay - at a credit union based in VA and we're in FL. We use an ATM linked to the credit union if we need paper cash. Guess I'll just have to spend the coins when I rarely shop. Thanks for the info.

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  8. "The reason that inflation hasn't kept up with gains in the money supply simply has been that people are sitting on cash rather than spending it."

    Or perhaps it has to do with the fact that the Fed doesn't take cost of living (food, fuel, energy, etc. costs) into account when it calculates inflation levels.

    I assure you Fed, I am spending every penny I have. (not happy about it mind you) I am spending every penny I have just keeping the family fed, sheltered and the cars gassed up.

    Thanks to the health insurance we have to buy (but can't afford to use) we don't have money to "hoard".

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    Replies
    1. Sheesh, me, too! We have a grand total of $100 left for the next 9 days to pay for gas, all the food, livestock feed, and pet food for seven people.

      We're going to be eating lots of rice, potatoes, eggs, chicken, and blueberries.

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  9. I'm sure the PTB are looking at ways to invest (read, confiscate for their purposes) all that money we're hoarding. At least the funds we have in the bank and in retirement accounts. Always willing to help us behave more wisely, you know.

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  10. Very scary! Sounds like the start of a brainwashing scheme to make future "bail in" programs (like Cyprus et al ) seem righteous.

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    Replies
    1. Bingo there's the whole point of the article !

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  11. What's even scarier, it could turn into what's happening in Europe. They just come in and confiscate your funds in the bank.

    Earl

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    Replies
    1. As far as I know (I live in Europe), nothing like this has happened anywhere except Cyprus. Which is bad enough, of course.

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  12. In days past the savings (hoarded money) was where the banks got the money to make loans. That was real money - not money created from thin air.
    JW M

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  13. Of course you should spend all of your "savings" accounts. The banks and their government lackies certainly intend to steal it all at a time convenient to them. So go spend it -- preferably on gold, silver, food, and productive assets.

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  14. And whatever you do, DON'T save cash and those slugs in your pockets we call "coins" (you know, nickels, dimes, quarters, etc.) Put your "money" into precious metals. If you can't afford gold (I sure can't), buy silver and... yes, HOARD it! Ammunition will be worth its weight in gold one day, as well. --Fred in AZ

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  15. I spend every dime I earn. I buy what I need for the future, why you ask? Because in the future everything will cost much more that it does today, and I will actually get less goods spending the same amount of money that I spend now.

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  16. banks love us these days for having savings accounts-afterall, they pay us about a nickel for every thousand dollars you have in a current account so banks can lend/loan money to others and charge 8-18% or more in interest. this goes for big banks and itty bitty banks these days...joe blow is always gonna be damned if he does and damned if he dont.

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  17. I would like to point out one thing; "The answer lies in the private sector's dramatic increase in their willingness to hoard money" The private sector can mean several things, but mostly when economists are talking about it, the private sector means businesses & corporations. The last thing on their minds are the actions of private individuals, because most people don't matter in their calculations.
    So try reading the article in that light. "The answer lies in the corporations' dramatic increase in their willingness to hoard money instead of spend it."

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    Replies
    1. You mean like 401 k funds, money market accounts, and other retirement and pension funds? Just a matter of semantics, chum. We, the little people who work for a living and eek out savings for the future, are exactly who they mean by the "private" sector.

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  18. A team of researchers gave a smile to a family
    A deaf baby hears his parents for the first time
    http://www.divertissonsnous.com/2014/09/03/un-bebe-sourd-entend-ses-parents-pour-la-premiere-fois/
    Have a nice day,

    Trystia

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  19. A team of researchers gave a smile to a family
    A deaf baby hears his parents for the first time
    http://www.divertissonsnous.com/2014/09/03/un-bebe-sourd-entend-ses-parents-pour-la-premiere-fois/
    Have a nice day,

    Trystia

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  20. The final word in the post says it all "Wheeee!"

    That is about the level of thought that goes through some spend-heavy minds. "Why save? The Government will take care of us! Yay, Government! Wheee!"

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  21. Lost the post, so here goes again: The man is an Idiot...That's all I can say.
    Love from NC

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  22. This is the Fed laying the groundwork for out and out seizure of all accounts, like in Greece. For the betterment of the country you understand, since you peons don't know what's best for you and your country, we'll take your money and put it to good use.

    Steve Davis
    Anchorage, Alaska

    ReplyDelete