Why Consumers are Saving More

Crushed Consumption: The Unintended Consequence Of Bernanke’s Arrogance | ZeroHedge.

Consumers are saving more because of anxiety. The recession showed everyone how close we all are to living hand-to-mouth. People wish to have a larger cushion for the next recession, but it looks like they also realize that they will need more savings for future actions.

These graphs show the futility of attempting to control the economy with monetary policy. The Fed may be able to create some movement in the short-term, but these gains are wiped out by people adjusting their spending and saving preferences in the long-term.

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