by Steve Beaman, Contributor, USDR
We continue to see lackluster performance in the U.S. & western economies as debts continue to grow, productivity stagnates and the new normal is defined by temporary jobs rather than permanent jobs. It was just released that the second largest employer in the United States behind Wal*Mart is Kelly Services, a provider of temporary workers.
The market rebounded on the belief that the Federal Reserve will continue its soft-money policy even after Bernanke’s term ends and a new Fed Chairman is anointed by President Obama. People like Alan Blinder of Princeton, Janet Yellen (a current Fed Board Member), and Larry Summers are in consideration for this post that opens up on January 31, 2014. The next Fed Chairman faces daunting challenges as the stimulus created by soft-money is about at the end of its useful life; how much lower can rates go, and how much longer can they be sustained at these levels? We all know (or should know) that when the Fed stops buying its $85 billion per month in Treasury debt rates will rise and if it keeps buying that debt we’re building a truly horrific scenario in which we totally lose control of the dollar. Not a job for the weak at heart.
Today’s SAFE Insight is excerpted from a speech I recently gave and explores the issue of “savings” in the United States. Our national savings rate has declined from its’ historical average of around 10% of national income to a dismal less than 2% number. This does not create a sustainable economy and greatly throws into question the retirement prospects for millions upon millions of Americans.
Steve Beaman is President of the Society for the Advancement of Financial Education, and a contributor for both USDR and the Price of Business on Bloomberg’s Home in Houston, 1110 AM KTEK.
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