7 ms·

This is a very american thing. I'm french and live in China, what you're describing is really foreign to me. I'd say "most people" save a lot for retirement an

by xwolfi 7y ago

This is a very american thing. I'm french and live in China, what you're describing is really foreign to me. I'd say "most people" save a lot for retirement and their first house buy, "most people" live way below their salary max, "most people" would slap you for considering a consumer loan. What happened to you guys to go so deep in the hellhole to not even see it's madness to live that way...

Aperocky 7y ago
The culture is really different, and frankly, it's not a clear cut 'this is simply better' thing. China had trouble expanding their domestic market because people just save the money they earned instead of spending it on things.
- colechristensen 7y ago
  If, in aggregate, people are saving more than they're earning, your economy is necessarily shrinking on a per-capita basis (or your central bank is injecting money into the economy and your "savings" is being inflated away). If you're not investing in some creative act, you're taking capital away from everybody else.
  - Aperocky 7y ago
    Exactly, as much as loans and savings go, they don't physically alter the currently available resources to be consumed, which really has nothing to do with money at all. A society can't just collectively save most of its income for it to be magically available at a later date. It's just suffering deflation while exporting inflation into the future. It's some sort of prisoner's dillema that high-saving countries usually run into.
  - kds3 7y ago
    > or your central bank is injecting money into the economy and your "savings" is being inflated away This classical macroeconomic principle does not work any more [0]. Today inflation is not directly related to central bank actions. [0] https://www.economist.com/special-report/2019/10/10/inflation-is-losing-its-meaning-as-an-economic-indicator https://www.economist.com/special-report/2019/10/10/inflatio...
    - colechristensen 7y ago
      Meh, I think it has more to do with central bank actions being so far removed from buying eggs at the grocery store that the macroeconomic effects are just not very tightly coupled with specific actions. People aren't making different decisions w.r.t. the cost of capital and banks giving loans aren't giving riskier loans when interest rates are lower - the risk and the interest have little coupling at all. So central bank actions are only having effects inside the very navel-gazing financial industry that is moreso playing its own game than interacting with the outside world. That is, central bank actions' effects are being hidden by complexity that will take time to shake out. Interest rates and bailouts and the like are only affecting a certain tier of society and it will take a while for those waves to spread to the rest of us.
    - winfred 7y ago
      If over time, you change the way you measure inflation[0], to manipulate government bond rates and Social Security payouts[1], then it's not surprising you end up with a world where inflation is not directly related to central bank actions.[2] [0]http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts [1]https://www.businessinsider.com/if-people-knew-the-actual-inflation-rate-it-would-crash-the-economy-2016-8 https://www.businessinsider.com/if-people-knew-the-actual-in... [2]https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex....
colechristensen 7y ago
Looking at the numbers, it seems French household debt to income has actually surpassed American (both around the 100% of disposable income) in just the last few years. French ratios have been gradually increasing for the last 25 years and American has been falling for the last decade. One factor is Americans have significantly higher disposable income and can service more debt. https://data.oecd.org/hha/household-debt.htm#indicator-chart https://data.oecd.org/hha/household-debt.htm#indicator-chart

by xwolfi 7y ago

Aperocky 7y ago

The culture is really different, and frankly, it's not a clear cut 'this is simply better' thing. China had trouble expanding their domestic market because people just save the money they earned instead of spending it on things.

colechristensen 7y ago
If, in aggregate, people are saving more than they're earning, your economy is necessarily shrinking on a per-capita basis (or your central bank is injecting money into the economy and your "savings" is being inflated away). If you're not investing in some creative act, you're taking capital away from everybody else.
- Aperocky 7y ago
  Exactly, as much as loans and savings go, they don't physically alter the currently available resources to be consumed, which really has nothing to do with money at all. A society can't just collectively save most of its income for it to be magically available at a later date. It's just suffering deflation while exporting inflation into the future. It's some sort of prisoner's dillema that high-saving countries usually run into.
- kds3 7y ago
  > or your central bank is injecting money into the economy and your "savings" is being inflated away This classical macroeconomic principle does not work any more [0]. Today inflation is not directly related to central bank actions. [0] https://www.economist.com/special-report/2019/10/10/inflation-is-losing-its-meaning-as-an-economic-indicator https://www.economist.com/special-report/2019/10/10/inflatio...
  - colechristensen 7y ago
    Meh, I think it has more to do with central bank actions being so far removed from buying eggs at the grocery store that the macroeconomic effects are just not very tightly coupled with specific actions. People aren't making different decisions w.r.t. the cost of capital and banks giving loans aren't giving riskier loans when interest rates are lower - the risk and the interest have little coupling at all. So central bank actions are only having effects inside the very navel-gazing financial industry that is moreso playing its own game than interacting with the outside world. That is, central bank actions' effects are being hidden by complexity that will take time to shake out. Interest rates and bailouts and the like are only affecting a certain tier of society and it will take a while for those waves to spread to the rest of us.
  - winfred 7y ago
    If over time, you change the way you measure inflation[0], to manipulate government bond rates and Social Security payouts[1], then it's not surprising you end up with a world where inflation is not directly related to central bank actions.[2] [0]http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts [1]https://www.businessinsider.com/if-people-knew-the-actual-inflation-rate-it-would-crash-the-economy-2016-8 https://www.businessinsider.com/if-people-knew-the-actual-in... [2]https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex....

colechristensen 7y ago

Looking at the numbers, it seems French household debt to income has actually surpassed American (both around the 100% of disposable income) in just the last few years. French ratios have been gradually increasing for the last 25 years and American has been falling for the last decade. One factor is Americans have significantly higher disposable income and can service more debt. https://data.oecd.org/hha/household-debt.htm#indicator-chart https://data.oecd.org/hha/household-debt.htm#indicator-chart