Americans simply need to save more money to pay for financial setbacks.
This is the recommendation that Federal Reserve Chair Janet Yellen has for those who are “extraordinarily vulnerable.” Yellen told a crowd in Washington during a speech Thursday that an unforeseen expense of just $400 would force a majority of Americans to avoid paying the bill, borrow money from a friend or sell something they own.
Yellen noted that the bottom fifth of United States households had a median net worth of $6,400 in 2013, but most of these households had nothing set aside for a rainy day or maintained a negative net worth. This means their debt was far greater than their personal assets.
“The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with few assets to fall back on,” Yellen said in her oration to a conference sponsored by the Corporation for Enterprise Development, a national non-profit organization that attempts to expand economic opportunity for low-income families.
“For many lower-income families without assets, the definition of a financial crisis is a month or two without a paycheck, or the advent of a sudden illness or some other unexpected expense.”
The head of the U.S. central bank said that the Federal Reserve will try to encourage and promote efforts that would prompt families to take minor steps to start saving more and accumulating greater assets.
One must ask, however: is this a joke on the part of Yellen and the Fed?
A major reason why many Americans are not saving is because of the lack of incentive: the rate of returns is minuscule. If someone were to deposit a $1,000 into a savings account then they’re lucky if they get a buck a year. With artificial, record-low interest rates, people are discouraged from saving their money and decide to use that money to purchase stuff today, especially with inflation running rampant.
If Yellen were genuine in her remarks then she would raise interest rates – or allow the market to determine the rates – and produce sound money so that consumers have a higher purchasing power. It’s her policies that are either directly or indirectly affecting the pocketbooks and savings habits of Americans.
Let them eat cake and save more.
Want us to save? Stop deficit spending, watering down the currency and supressing interest rates!
Send me a memo when you get that done.
It’s STUPID to save when the purchasing power of the dollar will NEVER NEVER NEVER be stronger than it is right now. Everything in the local Dollar Store went up 20% last week. How long would my dollar have to sit in a 1% bank account to buy a candy bar that I could have bought for 20% LESS only two weeks ago? Don’t bother with the math because when it did actually gain 20% prices will have gone up SEVERAL more times. There are NO better investments than non-perishable things you’ll eventually need – like soap, toiletries, clothes, hardware, etc.
Why don’t we throw the illegal filthy Fed Res non American douchebag cartel out of the country and stop giving money to freeloaders by the millions and stop pointlessly giving money to the world’s biggest pain in our ass, Izzzzreeeeeell…..