The Great Consumer Crash of 2009...Are you ready?

Parent Cafe
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<p>Maki and Palumbo (2001) used cohorts (or families grouped by income or education) to examine the saving rate behavior across income groups. Their findings suggest the decline in the aggregate saving rate observed in the chart was not a phenomenon that extended across all categories of households. Rather, the decline in the saving rate at the aggregate level was primarily the result of a behavioral response by wealthy households to a surge in stock market wealth; as this group’s stock market wealth and net worth soared, it significantly reduced its saving out of current income. Their research is reported in Finance and Economics Discussion Paper, 2001-21, published by Federal Reserve Board of Governors. Two excerpts from their conclusion illustrate key findings of their research that relate to trends in the saving rate:4 </p>

<p>[What</a> steps can be taken to increase savings in the United States economy? (02/2002)](<a href=“What steps can be taken to increase savings in the United States economy? – Education”>What steps can be taken to increase savings in the United States economy? – Education)</p>

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<p>The speaker at S2’s convocation this week was an economics professor who is a Nobel prize winner. So, I’m thinking he knows what he is talking about regarding economics.</p>

<p>He was telling about growing up in the depression and how his family lost their farm. He said that they struggled but got by just like people are going to be doing again very soon. What?! Did he just say people were going to be struggling like in the Depression again very soon?! scary.</p>

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Oh, I already did that before Y2K and my kids still won’t let me live it down. :rolleyes:</p>

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<p>So I was not alone worried about Y2K. I didn’t worry so much about food that time, but having enough cash around, the banking system and all that. So for about 4 months I had $$$ bills taped under my bed, food money :cool: </p>

<p>Now I have some bullion around in a SDB, but mom said when times were really bad, it’s almost no point to have gold around unless you have the means to defend the ownership. She went through that experience as a little girl. Our family was robbed of our gold, a life time of savings at bayonet point. At least grandma and mom escaped with their lives. :(</p>

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<p>I was in my mother’s bank yesterday, 4.5% on CD on minimum $1000, 13 month. I was tempted, I would have if a toaster was included.</p>

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<p>Grandpa told DH & his brother that he had gold bars in the garage, had had them for years. He wanted to turn them in, so they made an appointment as some sort of high security vault…drove in with all the security…they pointed out he had some Mexican silver coins worth a very small amount and sent him away to turn them in somewhere else. It was very sad for poor Grandpa who thought he had a fortune stashed</p>

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<p>Australia’s paying 8.1 to 8.2 percent on one-year CDs.</p>