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On October 18, 2007 , Harvey Rosenblum wrote an op-ed piece in the Wall Street Journal titled “Fed Policy and Moral Hazard.” Mr. Rosenblum was aiming his thoughts toward the Federal Reserve and the “Bernanke put”, citing support for further fed easing in light of few signs of inflation. Tucked inside his contribution to that day’s Continue reading Spend, Save and Invest – Our Moral Hazard Last year, Mohamed El-Erian, CEO of PIMCO, the influential bond shop, declared a “new normal,” a global realignment in which the U.S. consumer, no longer a hungry monster, became cautious and subdued. The current circumstances might be better described as the new abnormal, in which no one knows anything. In June the Conference Board Consumer Confidence Continue reading The New Abnormal: Consumer Psychology – Whether to Spend or Save While the Commerce Department released a report Friday morning showing another modest increase in personal income in April, the report unexpectedly showed that personal spending came in unchanged compared to the previous month. The report showed that personal income increased by 0.4 percent in April, matching the upwardly revised increase seen in the previous month. Economists Continue reading Household Spending and Saving Appears to be Finding the Happy Medium In 2006, during the height of recent prosperity, the Labor Department shared two statistics: 1) Only 60% of the 110 million private-sector employees were covered by a workplace retirement plan. 2) Many of those 60% who were covered fail to participate in their employer’s plan. 3) 30% of Americans have no retirement savings. 4) Half of all 401(k) participants Continue reading Our Low Savings Rate – Is our Government an Enabler? The availability of money to spend, global growth, especially in emerging markets, and greed, all help to explain why equities can be expected to be a great investment going forward. Zachary Karabell, president of River Twice Research and the author, most recently, of “Superfusion: How China and America Became One Economy”, helps us to understand, in Continue reading Wealth and Equities: Cash and Global Growth to Propel Stocks Richard Karlgaard, Forbes publisher, speaks out on inflation as an only viable option for the U.S. to address its debt problem – given the proclivity of Americans to spend and not save. Prosperity Concierge and others don’t believe in the inevitability of inflation. Still, we value Mr. Karlgaard’s opinion. Mr Karlgaard: The end of imported deflation plus Continue reading If the U.S. Doesn’t Start to Save, is Inflation Inevitable? The U.S. Savings rate is expected to climb – kind of a “day of reckoning” response to the debt contraction and job losses experienced during the past 12 months. Kelly Evans, WSJ columnist, shares a viewpoint that expectations of frugality may be too optimistic. Ms. Evans: New frugality? Not so fast. A sharply higher U.S. household-savings rate was expected Continue reading Expectations For A Higher Savings Rate May Need To Be Tempered | How Frugal Have We Become? |
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