"Trump now has the support of 73% of Republicans, while 77% of Democrats back Clinton. But Trump picks up 15% of Democrats, while just eight percent (8%) of GOP voters prefer Clinton, given this matchup. "
I saw that one and it's definitely interesting. But Rasmussen has a very poor record--see last Presidential election--so I'd like to see a few more polls that agree before giving it too much weight.
Facepalm. The plot proves nothing. Also, QE does not primarily buy 10 year treasuries. It buys some, but mostly it buys crummy bonds that others will not buy.
I've had it with you. I don't believe anything you say from now on. My goodwill is exhausted.,
The recent bad mortgage buying is an anomaly. QE is usually buying and selling government securities on the open market
"Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity. Quantitative easing is considered when short-term interest rates are at or approaching zero, and does not involve the printing of new banknotes."
I think I see at least part of the cause of your misperception now: Your understanding of the terminology is completely wrong. What you are describing above is not a "savings glut", it is an ownership (wealth) INEQUALITY GLUT. Outright ownership of land, houses, buildings, factories, company shares, and intellectual property is not "savings", it is CAPITAL. Yes, there is a massive inequality glut as pertains the ownership of capital. But that is something entirely different than a "savings glut". Can you agree on that? That would really help.
I agree that some of the wealth of the super rich is in the form of capital, yes. But they also have immense amounts of savings. So, no, I don't think I agree.
Second, you say that there is "too much money". That "too much money" is coming directly from the Federal Reserve, courtesy of their QE program in combination with ZIRP.
I don't belong to the Fed cult so we will disagree on this one too. The Fed controls exactly 1 rate which is almost never used. It influences others through it's open market policies, but if you look at a chart of 10 year treasury over time overlaid with Fed QE programs you'll see that they have basically zero effect. Iwog has posted this in the past and I'll try to find it and include in this post.
It is absolutely the extra savings of the 1% that is driving down rates. You can tell very easily because this slow reduction in rates has been ongoing for 20+ years. Much, much longer than any QE policies from the Fed.
One more thing. If the rich does not want to "spend" their savings (I'm talking about actual savings on deposit now), as you are calling for, the bank will "spend" it for them, by lending it out OR speculating with it for their own account (they can, to some extent, thanks to the repeal of the Glass-Steagall act).. Right now there is a massive bubble going on both in the stock market and the housing market and the bond market, all at the same time.
No offense, but anyone who thinks we have 3 simultaneous massive bubbles isn't thinking clearly.
There was no substance in your post. Just a made up numerical example.
Do you agree that wealth inequality has increased significantly over the last 50 years?
Do you agree that obscenely rich people save at much, much, much higher rate than those in the middle or lower classes?
Assuming yes to both (those are facts), then it stands to reason that overall savings is higher.
Come on--it is entirely logical. And it explains why we're where we're at today very easily.
Suppose all the "savers" decided to "spend" all their savings on buying houses. What would happen to the proceeds of the purchases? Well, they would just end up in different bank accounts with a different name on it. Heck, maybe your name, even. But then money is back to being "savings" again. Nothing changed, except the buyers got more heavily into debt, unless they had enough savings to buy the whole house rather than just funding a down payment and taking up a loan.
Big picture--if debt increasing faster than savings, rates would be going up rather than down. Right now there is too much money looking for too few investment opportunities. That's why rates on all debt are low.
The problem, I think, is that your thinking is completely clouded by your self-interest as a real-estate investor and landlord. Home prices fell? Unwilling or unable buyers? Must be a savings glut! People unwilling to pay nosebleed rents? Well, those cheap bastard savers. Savings glut again!
I'm not a real estate investor nor a landlord so that theory is shot. What you describe above is a strawman. I'm saying that falling rates indicate a savings glut, not falling house prices or rents.
I'm not going to spend much time on discussing this with you. I advise all readers to read my analysis, and see if it makes sense, and whether what Tatapu says makes any sense,.. That is all I ask for,
I would do the same. I welcome anyone who doesn't think I make sense to please respond with why. Believe it or not, I've learned a great deal coming to pat.net and I had my mind changed several times. Maybe this another time.
Given the very low net worth (NW=assets-debts) of most Americans, there is no way the theory of the "savings glut" can be true
Of course it's true and I'll show you in a couple ways.
#1---Despite what Austrian "it's always the Fed" folks tell you, interest rates ARE set by supply and demand. When rates are very low, like now, it means that there is much more demand for the bond, bill, etc. than there is supply. And that demand comes from savings.
#2--In order to understand what is going on, you have to understand that wealth is extremely unequal right now. Here's a simple example to illustrate:
If 1 trillion is equally distributed and everyone saves 10%--then there is 100 million in savings.
If 1 trillion is distributed where 90% split 100 million and save 0% (because they are barely scraping by) and 10% split 900 million and save 50% because they simply cannot spend that much--there is 450 million in savings.
And, thus, you can see how--even when 90% of the population saves nothing--there is 4.5 times as much total savings in the economy.
Most of their wealth comes from the stock ownership of their company. Go ahead should down every major company, reduce everyone's 401K's to zero, get 10's of millions unemployed, and turn America into Venezuela.
You'd be much better off paying the workers according to their ability to create wealth in the company. That way billionaire parasites would get nothing and the lower level workers that create wealth are paid.
How do you think they were able to fund the loans? They were able to fund the loans through securitization. They could pawn the loans off to others. So, securitization worked so well because people wanted the AAA rated bonds that were the result of the securitization. Only they turned out to be bogus AAA. There weren't really AAA. Insurance companies and others would have never been able to buy them had they been rated correctly.
Of course, but all of this is possible without any Fed action on anybody's copula. Wall St., banks, and ratings companies all worked together.