WASHINGTON (AP) — The Great Recession showed that a large number of American families are “extraordinarily vulnerable” to financial setbacks because they have few assets to fall back on, Federal Reserve Chair Janet Yellen said Thursday
Yellen said a Fed survey found that an unexpected expense of just $400 would force the majority of American families to borrow money, sell something or simply not pay.
“The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with few assets to fall back on,” Yellen said in a Washington speech.
She said the bottom fifth of households by income — about 25 million households — had median net worth in 2013 of just $6,400, and many of these families had nothing saved or negative net worth, meaning their debts were greater than their assets. ………
Yes, Janet, you idiot, we should save more money. Except, interest rates on our savings is …. well, zero, or near zero, depending upon the type of account.
Given that the inflation rate is above the savings rate, why would anyone do this?
This is the problem with fractional banking. Yes, I want, and have a little nest egg. But, I’m not ever going to have a large nest egg, at least, not in any currency, much less the US dollar. It’s stupid to do so. Save money, and it’s guaranteed to be rotted away by inflation.
Janet, you want to fix this? Make sure banks have enough cash on hand to cover their debits. Then, we’re done, and this problem is fixed. Oh, but, then, the need for the federal reserve is diminished in a great manner, isn’t it?
In recent years, all the federal reserve has done was to ensure that the American people didn’t save money. And, they continue to do so. They, like all the other Keynesians, believe immediate spending substitutes for a proper economy.
Now, some of the idiots are coming to believe we should save money? Why and how?
Well, here’s how. Buy assets. The ones with the most lasting value are gold and silver for one side, land for another.