The Fed vs. Savings

 

 

The Federal Reserve and in particular fiat money ruins the incentive to save for a better future. Half of all Americans have zero dollars in a savings account and another 20% have less than $1000.

You can see this clearly on the graph. Personal savings as measured by the government peaked in the final days of the Bretton Woods gold standard in the early 1970s at around 14%. Since then there has been a relentless decrease in the savings. The savings rate bottomed during the Housing Bubble at around 2.5%. The savings rate has recovered during the Financial Crisis to around 5%, but most of this is not related to building a better future, but rather fear of the future and the highly unorthodox monetary policy conducted by the Fed and other central banks.

22 min ago

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

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