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Not sure if we're calling it too early. Personal savings are half of what they used to be before COVID while personal debt has doubled. It seems like what's kee

Not sure if we're calling it too early. Personal savings are half of what they used to be before COVID while personal debt has doubled. It seems like what's keeping this economy afloat is people going into debt and/or dipping into their savings to spend. The job market is red-hot and the money supply is still in the stratosphere compared to pre-COVID. The housing market is a mess for probably the next 10 years as the builders try to catch up with demand. There is really not a lot of great things going right now and I hope the FED has learned it's lesson from the 70/80s when they stopped raising rates too early and the CPI shot up to even higher highs from new lows.

Eumenes 3y ago
I just made a comment that pretty much is aligned with yours. Taking a victory lap on inflation numbers is just silly. There's some serious rot going on atm. We're probably a small disaster away from a really big problem.
- genghisjahn 3y ago
  Aren't we always a small disaster away from a really big problem?
  - gjsman-1000 3y ago
    "It hasn't happened yet, therefore it can't happen." Well, yes, we are always at that risk... but even basic numbers are getting much worse. Depending on who you ask, about 37% of Americans (give-or-take) cannot withstand a sudden $400 expense without using debt. This is ~5% higher than it was a year before, in 2021 when it was 32%. https://www.federalreserve.gov/consumerscommunities/shed.htm https://www.federalreserve.gov/consumerscommunities/shed.htm It goes without saying that there is a finite ceiling for how much debt a person can obtain. When 1/3 of the country risks hitting that ceiling with how debt use has increased, is unable to get more debt, and can't afford $400; you have a perfect recipe for extreme social unrest in the future if things don't turn around. It's made worse by inflation eating away at pay, and also the record-high APRs that credit cards are demanding; and high rates in general for debt of any kind.
    - ryanwaggoner 3y ago
      This number was 50% back in 2013, so I’m not sure it’s the canary in the coalmine that you’re making it out to be.
      - oneTbrain23 3y ago
        In 2013, there was no Ukraininian war, and China and Japan willing to hold huge chunk of American bonds to allow financing of Afghan-Iraq wars. There is no brics too with cryptocurrencies/digital negligible on the far far fringe. Today, American concluded Afghan and Iraq wars with humiliation defeat. Entire "war investments" didn't yielded a single embassy over there let alone the fable 3T$ mining rights of lithium there. Chinese now actively pursuing space explorations and photonic chips while US losing tons of bright Indian+Chinese scholars coming over. Plus, in terms of poor people and population growth, there are more today than 2013. Plus Siberia is thawing making Russia now more hospitalable than Bush time. Non of American hypersonic missiles operational while Russian and Chinese are in the process of changing all their nuke missiles to newer missiles. American Patriots and Thaad are widely jokes in military industries. And the greatest kicker is in the east for centuries there are prophecies of American destructions from possibily nukes. Even John Titor in the early Bush era or late Clinton era hinted his timeline USA nuked by Russia and China. With current Biden and woke cultures permeating entire USA, those kind of economic numbers would force American governments to do very stupid thing since lacking room to manuerve. It's canary, but dead or alive, miners dont care.
        ryanwaggoner 3y ago
        I’m sure you could have penned a similar screed in 2013.
    - JumpCrisscross 3y ago
      > inflation eating away at pay Real wages are lower than their pandemic highs, but higher than they've been at any point [EDIT: before] late 2019 [1]. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- nathanaldensr 3y ago
  This kind of spin is part of the reelection efforts of a specific person and their party. I'm not surprised to see water-carrying and, frankly, propaganda here on HN about inflation.
spywaregorilla 3y ago
Source? A quick google returns mostly links suggesting personal savings are up vs. pre covid.
- gottorf 3y ago
  Straight from the horse's mouth: https://fred.stlouisfed.org/series/PSAVE https://fred.stlouisfed.org/series/PSAVE It appears it's trending up from a local bottom last year, but it's still lower than most of the past decade before Covid. Also this number isn't on a per-capita basis.
  - JumpCrisscross 3y ago
    > this number isn't on a per-capita basis Here is the personal savings rate [1][2]. We're low, but not abysmal and repairing. [1] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT [2] https://www.bea.gov/data/income-saving/personal-saving-rate https://www.bea.gov/data/income-saving/personal-saving-rate
  - marcusverus 3y ago
    The average person will read this sentence: > Personal savings are half of what they used to be before COVID while personal debt has doubled. And assume you're saying that the average person has half as much money in the bank as they did before COVID. Your data don't support that assertion--they show that people are still saving money, just at a slower rate. Wouldn't that imply that people have more money in the bank than pre-COVID? Anyway, spending (rather than saving) money during a period of high inflation is textbook "rational consumer" behavior, and is hardly evidence of a horrible, terrible, no good, very bad economy.
  - danielmarkbruce 3y ago
    Not straight. It's from the horses mouth but then bent. "saving" != "savings". One is income statement, other is balance sheet. One is verb, other is noun. One is river, other is dam. Etc.
- sakopov 3y ago
danielmarkbruce 3y ago
Saying "savings" is wrong, it's not what is reported. It's "saving". "Savings" implies the total sum people have saved. Saving can go down while savings is going up. I could have started 2021 with 0, save $100 in 2021, $50 in 2022. Savings going up, saving going down. You can see the confusion caused below by mis-stating what was reported. https://fredblog.stlouisfed.org/2023/05/despite-high-inflation-households-havent-depleted-their-pandemic-related-savings/?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=fredblog https://fredblog.stlouisfed.org/2023/05/despite-high-inflati...
deleted 3y ago
[deleted]
shrimp_emoji 3y ago
My personal savings are the same. 0 / 2 = 0
piva00 3y ago
> The housing market is a mess for probably the next 10 years as the builders try to catch up with demand. The housing market will be a continuous mess while policy is to consider it as a major investment asset, there's no way around that, people buy houses expecting they appreciate in value so they can sell and buy their next, bigger house. That's the dream of almost anyone I know who purchases a house, politicians who implement policies which will cause houses to lose their stratospheric value (at least in major cities across the world) will commit career suicide. There's no incentive to push houses' prices down until most people are completely squeezed out of the market: people get mortgages for a house at value X, any price below X is a loss and so they will fight tooth-and-nail for keeping their assets valued above X... Yes, it's all politics but it's an issue where there's no way out of it that isn't political, some politicians will have to sacrifice themselves, those sacrifices will create a lot of pain to whomever bought an overvalued house at current prices including people going under on their mortgage, selling at a loss, and quite a few will go into financial duress because of it. Societies need a different housing strategy and policies to support it, the current one where housing is both a major investment asset as well as basic necessity does not work.

Eumenes 3y ago

I just made a comment that pretty much is aligned with yours. Taking a victory lap on inflation numbers is just silly. There's some serious rot going on atm. We're probably a small disaster away from a really big problem.

genghisjahn 3y ago
Aren't we always a small disaster away from a really big problem?
- gjsman-1000 3y ago
  "It hasn't happened yet, therefore it can't happen." Well, yes, we are always at that risk... but even basic numbers are getting much worse. Depending on who you ask, about 37% of Americans (give-or-take) cannot withstand a sudden $400 expense without using debt. This is ~5% higher than it was a year before, in 2021 when it was 32%. https://www.federalreserve.gov/consumerscommunities/shed.htm https://www.federalreserve.gov/consumerscommunities/shed.htm It goes without saying that there is a finite ceiling for how much debt a person can obtain. When 1/3 of the country risks hitting that ceiling with how debt use has increased, is unable to get more debt, and can't afford $400; you have a perfect recipe for extreme social unrest in the future if things don't turn around. It's made worse by inflation eating away at pay, and also the record-high APRs that credit cards are demanding; and high rates in general for debt of any kind.
  - ryanwaggoner 3y ago
    This number was 50% back in 2013, so I’m not sure it’s the canary in the coalmine that you’re making it out to be.
    - oneTbrain23 3y ago
      In 2013, there was no Ukraininian war, and China and Japan willing to hold huge chunk of American bonds to allow financing of Afghan-Iraq wars. There is no brics too with cryptocurrencies/digital negligible on the far far fringe. Today, American concluded Afghan and Iraq wars with humiliation defeat. Entire "war investments" didn't yielded a single embassy over there let alone the fable 3T$ mining rights of lithium there. Chinese now actively pursuing space explorations and photonic chips while US losing tons of bright Indian+Chinese scholars coming over. Plus, in terms of poor people and population growth, there are more today than 2013. Plus Siberia is thawing making Russia now more hospitalable than Bush time. Non of American hypersonic missiles operational while Russian and Chinese are in the process of changing all their nuke missiles to newer missiles. American Patriots and Thaad are widely jokes in military industries. And the greatest kicker is in the east for centuries there are prophecies of American destructions from possibily nukes. Even John Titor in the early Bush era or late Clinton era hinted his timeline USA nuked by Russia and China. With current Biden and woke cultures permeating entire USA, those kind of economic numbers would force American governments to do very stupid thing since lacking room to manuerve. It's canary, but dead or alive, miners dont care.
      - ryanwaggoner 3y ago
        I’m sure you could have penned a similar screed in 2013.
  - JumpCrisscross 3y ago
    > inflation eating away at pay Real wages are lower than their pandemic highs, but higher than they've been at any point [EDIT: before] late 2019 [1]. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
nathanaldensr 3y ago
This kind of spin is part of the reelection efforts of a specific person and their party. I'm not surprised to see water-carrying and, frankly, propaganda here on HN about inflation.

spywaregorilla 3y ago

Source? A quick google returns mostly links suggesting personal savings are up vs. pre covid.

gottorf 3y ago
Straight from the horse's mouth: https://fred.stlouisfed.org/series/PSAVE https://fred.stlouisfed.org/series/PSAVE It appears it's trending up from a local bottom last year, but it's still lower than most of the past decade before Covid. Also this number isn't on a per-capita basis.
- JumpCrisscross 3y ago
  > this number isn't on a per-capita basis Here is the personal savings rate [1][2]. We're low, but not abysmal and repairing. [1] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT [2] https://www.bea.gov/data/income-saving/personal-saving-rate https://www.bea.gov/data/income-saving/personal-saving-rate
- marcusverus 3y ago
  The average person will read this sentence: > Personal savings are half of what they used to be before COVID while personal debt has doubled. And assume you're saying that the average person has half as much money in the bank as they did before COVID. Your data don't support that assertion--they show that people are still saving money, just at a slower rate. Wouldn't that imply that people have more money in the bank than pre-COVID? Anyway, spending (rather than saving) money during a period of high inflation is textbook "rational consumer" behavior, and is hardly evidence of a horrible, terrible, no good, very bad economy.
- danielmarkbruce 3y ago
  Not straight. It's from the horses mouth but then bent. "saving" != "savings". One is income statement, other is balance sheet. One is verb, other is noun. One is river, other is dam. Etc.
sakopov 3y ago

danielmarkbruce 3y ago

Saying "savings" is wrong, it's not what is reported. It's "saving". "Savings" implies the total sum people have saved. Saving can go down while savings is going up. I could have started 2021 with 0, save $100 in 2021, $50 in 2022. Savings going up, saving going down. You can see the confusion caused below by mis-stating what was reported. https://fredblog.stlouisfed.org/2023/05/despite-high-inflation-households-havent-depleted-their-pandemic-related-savings/?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=fredblog https://fredblog.stlouisfed.org/2023/05/despite-high-inflati...

deleted 3y ago

[deleted]

shrimp_emoji 3y ago

My personal savings are the same. 0 / 2 = 0

piva00 3y ago

> The housing market is a mess for probably the next 10 years as the builders try to catch up with demand. The housing market will be a continuous mess while policy is to consider it as a major investment asset, there's no way around that, people buy houses expecting they appreciate in value so they can sell and buy their next, bigger house. That's the dream of almost anyone I know who purchases a house, politicians who implement policies which will cause houses to lose their stratospheric value (at least in major cities across the world) will commit career suicide. There's no incentive to push houses' prices down until most people are completely squeezed out of the market: people get mortgages for a house at value X, any price below X is a loss and so they will fight tooth-and-nail for keeping their assets valued above X... Yes, it's all politics but it's an issue where there's no way out of it that isn't political, some politicians will have to sacrifice themselves, those sacrifices will create a lot of pain to whomever bought an overvalued house at current prices including people going under on their mortgage, selling at a loss, and quite a few will go into financial duress because of it. Societies need a different housing strategy and policies to support it, the current one where housing is both a major investment asset as well as basic necessity does not work.