Things That Cant Go On Forever

The final figures for private savings in 2006 and the result is a whopping NEGATIVE 1%. This is reported as the lowest number in 74 years. That means that the last time the private sector in the US saved this little was in 1933 – at the bottom of the Great Depression. Nobody can doubt the need to do a little consumption smoothing in 1933 but what possible excuse can there be in 2006? This can’t go on indefinitely but the longer it does the more unpleasant it will be to unwind it. Time to batten down the financial hatches folks.

Correction – that should be personal savings not private savings (which adds business savings to personal savings) – thanks pgl for seeing this