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Due to the lockdown, people and companies are spending less. (Less Traveling, no reason to buy fancy clothes and other luxury items because you can't show them
by nroets 5y ago
Due to the lockdown, people and companies are spending less. (Less Traveling, no reason to buy fancy clothes and other luxury items because you can't show them to anyone)
So the savings rate skyrocketed. And it was already very high due to world wide demographic changes: The rapid economic growth in China and other East Asian countries over the last 40 years.
As interest rates fall, retired people earn less. So they save even more. It's a a positive feedback system.
So it's not a bubble, but a long term savings glut: More and more money chasing a fixed pool of productive capital.
- onlyrealcuzzo 5y agoGlobal debt to GDP is at an all time high, though: httpss://www.axios.com/global-debt-gdp-898959ed-f96a-4c4d-85a3-5d3cc419631f.html Personal / corporate savings is a fraction of public debt. This is why people think there's a "bubble". But you don't really have an "everything bubble" - that just means fiat money is worth less than you think it is. It's a reverse bubble with your wages.
- eps 5y agoClickable - https://www.axios.com/global-debt-gdp-898959ed-f96a-4c4d-85a3-5d3cc419631f.html https://www.axios.com/global-debt-gdp-898959ed-f96a-4c4d-85a...