Loading ...Some on mass media say we have more savers than borrowers now. And the savers are a burden on the deposit areas. Lots of moving parts, and or they have a tangled fishing line. For one example, to make a point, if during the prosperity days 1945-’75 we had a well off 80% middle class, and 10% wealthy and 10% poor. No problems. In balance. Spending, saving and borrowing maintaining 5%-7% rates. Even the inflation rates were 7.5%. Pay raises were possible easy and understandable.
Lets say over the decades, the middle class got smaller, 40% versus the 60% wealthy group, that got unnecessarily bigger. So the wealthy people have far more excess unspent (waste) money than they need, so it builds up or crowds into savings bonds, driving rates lower. Plus they don’t need anything to buy. They already have everything they need or want. And if they wanted to spend, could just pay cash, not borrow.
The system is out of balance. imo. The 40% have to watch their spending, and the 60% don’t need anything. And on the other hand the Fed acts like or implies, or is “making believe” they have been controlling the rates. But its likely the situation, or the system is controlling them.