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I think one of the issues is this, there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom. I do wonder t

I think one of the issues is this, there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom. I do wonder though, if all this cash in the bank people are hoarding for the downturn will have other effects on the economy, recession ? I'm in the same boat though, I've saved and invested a shirtload of cash waiting for a downturn.

benj111 4y ago
Are people hoarding cash/assets? From what I understand the savings rate has been dropping across the western world. In theory though, savings are countercyclical. People made unemployed can still maintain their spending. So it helps break the feedback loop of redundancies -> falling spending -> redundancies. Although we seem to be heading for recession, with high inflation and interest rates, so the normal mechanism of decreasing interest rates to get people spending isn't really available currently.
- bamboozled 4y ago
  I'm not spending my money until house prices come down basically, so maybe I'm the cause of the recession but bad luck I guess.
  - benj111 4y ago
    If you're refraining from spending you are suppressing inflation. Where high inflation looks like it is going to cause a recession. so I would say your actions are a net benefit.
- ChrisMarshallNY 4y ago
  > From what I understand the savings rate has been dropping across the western world. I’m not sure that’s the case. It may have just declined, but I think it was pretty high, during the COVID years.
  - benj111 4y ago
    I was thinking generational timescales, rather than the last 2 or 3 years, so we're probably both right.
pavlov 4y ago
> “…there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom.” I think this is basically what happened in mid/late 2020. There was a short-lived crash across all asset classes, from stocks to Manhattan condos, and people piled in with the Fed and other central banks willingly feeding stimulus money to the frenzy.

benj111 4y ago

Are people hoarding cash/assets? From what I understand the savings rate has been dropping across the western world. In theory though, savings are countercyclical. People made unemployed can still maintain their spending. So it helps break the feedback loop of redundancies -> falling spending -> redundancies. Although we seem to be heading for recession, with high inflation and interest rates, so the normal mechanism of decreasing interest rates to get people spending isn't really available currently.

bamboozled 4y ago
I'm not spending my money until house prices come down basically, so maybe I'm the cause of the recession but bad luck I guess.
- benj111 4y ago
  If you're refraining from spending you are suppressing inflation. Where high inflation looks like it is going to cause a recession. so I would say your actions are a net benefit.
ChrisMarshallNY 4y ago
> From what I understand the savings rate has been dropping across the western world. I’m not sure that’s the case. It may have just declined, but I think it was pretty high, during the COVID years.
- benj111 4y ago
  I was thinking generational timescales, rather than the last 2 or 3 years, so we're probably both right.

pavlov 4y ago

> “…there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom.” I think this is basically what happened in mid/late 2020. There was a short-lived crash across all asset classes, from stocks to Manhattan condos, and people piled in with the Fed and other central banks willingly feeding stimulus money to the frenzy.