Despite record lows for "savings rates", Americans are awash in cash?
Investors opt for cold, hard comfort
Investors opt for cold, hard comfort
Awash in Cash?
- Thread starter moghopper
- Start date
I think a significant part of the cash amount is due to borrowing and then holding the borrowed amount in a savings or money market account.
I know a lot of my family and friends (and me!) have borrowed low interest money through credit cards, mortgage refinances, or student loans. This money is then put in a savings or money market account of some sort at a higher rate than the loan interest rate. Some are getting these large cash amounts while the rates are/were low for future expenses (home improvements/additions, new vehicles, etc.).
5.6 trillion dollars is $18,700 per person. Not huge when you think about it.
I know a lot of my family and friends (and me!) have borrowed low interest money through credit cards, mortgage refinances, or student loans. This money is then put in a savings or money market account of some sort at a higher rate than the loan interest rate. Some are getting these large cash amounts while the rates are/were low for future expenses (home improvements/additions, new vehicles, etc.).
5.6 trillion dollars is $18,700 per person. Not huge when you think about it.
moghopper said:
The "average" family size of four is way above the real average of 2.59 persons per household (US census, 2000). Using the US Census average household size, the average household would have $48,400 in cash, CD's, money markets, etc. I'm not sure how much this means though, since it is a mean and not a median. The savings distribution is undoubtedly skewed in favor of the richer folks.
yakers
Thinks s/he gets paid by the post
Last year it was mentioned on the business news that Warren Buffett was holding $8B in cash waiting for something to buy. There may be quite a lot of folks doing the same thing on a smaller scale.
wabmester
Thinks s/he gets paid by the post
- Joined
- Dec 6, 2003
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Lesse, going from $4.6T to $5.6T over a 3 year period means 7%/year growth, which is what a lot of people here think is the "unmanipulated" inflation rate, so that means no change in inflation-adjusted terms. 
It looks like this guy is reporting about M2. I looked at the historical data to see if there was any correlation to the stock market. M2 went up 9% from Aug 2002-2003, which included the first big bull run. It went up only 3% the following year, in which stocks were basically flat. And it went up about 3.5% in the last year.
In summary, I have no idea what this means.
It looks like this guy is reporting about M2. I looked at the historical data to see if there was any correlation to the stock market. M2 went up 9% from Aug 2002-2003, which included the first big bull run. It went up only 3% the following year, in which stocks were basically flat. And it went up about 3.5% in the last year.
In summary, I have no idea what this means.
