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Drudge Retort: The Other Side of the News
Tuesday, November 22, 2022

Kansas City Federal Reserve Bank President Esther George said ample US savings will help to buffer households but could also mean higher interest rates are needed to cool spending.

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...George told a panel Tuesday in Santiago hosted by the Central Bank of Chile that if savings are concentrated in wealthier households who tend to spend a smaller share of their wealth, it might not provide much of an additional boost to spending.

"However, if those savings are spread more evenly across the population, including households with a higher propensity to spend out of their wealth, then the effect on the persistence of consumption is likely to be larger," she said, requiring higher rates, notwithstanding the wider benefits.

"While high savings is likely to provide momentum to consumption and require higher interest rates, it's certainly positive that we see that these households are wealthier, less financially constrained and better insured," she noted. "But that said, reduced inflation will mean we have to incent saving over consumption."...


#1 | Posted by LampLighter at 2022-11-22 06:47 PM | Reply

"However, if those savings are spread more evenly across the population, including households with a higher propensity to spend out of their wealth, then the effect on the persistence of consumption is likely to be larger," she said,

1. Well they're not.

2 "Higher propensity to spend out their wealth" is code for not-rich.

3. Any form of debt relief including student loan debt relief would be a step in that direction.

#2 | Posted by snoofy at 2022-11-22 08:33 PM | Reply

@#2

Woof, your alias drilled to the cored of the issue, even more so than its usual nor.

So, let's chat...

Given: "However, if those savings are spread more evenly across the population, including households with a higher propensity to spend out of their wealth, then the effect on the persistence of consumption is likely to be larger," she said,

Your alias said...

1) Well they're not. -- I agree. Those savings are not spread more evenly across the population.

2) "Higher propensity to spend out their wealth" is code for not-rich. ... Maybe yes, maybe no. It is not "wealth" but "income" that should be discussed. Let's try to state this in percentage of income, rather than wealth. If you want details, ask...

3) Any form of debt relief including student loan debt relief would be a step in that direction. ... imo, student debt relief is A Good Thing. But "any form" of debt relief? Well, we'll need to talk about the use of "any form"..


#3 | Posted by LampLighter at 2022-11-22 09:30 PM | Reply

#3 More properly: Any form of stimulus including debt relief to "households with a higher propensity to spend out of their wealth" would be a step in that direction.

#4 | Posted by snoofy at 2022-11-22 09:58 PM | Reply

And now for something completely different...

LUTHER WRIGHT AND THE WRONGS - comfortably numb
www.youtube.com

When Luther Wright and the Wrongs released their interpretation (yeah, let's call it that) of Pink Floyd's The Wall album, it created a bit of a stir.

#5 | Posted by LampLighter at 2022-11-22 10:04 PM | Reply

It seems as if all of the Feds tools for dealing with inflation are directed toward the demand side. Why none directed toward the supply side? Why not also incentivize manufacturers to produce more? Stimulating the supply side may not have as timely an effect as depressing the demand side but it would be a better long term fix that could ultimately reduce the likelihood/severity of future inflationary spirals.

#6 | Posted by FedUpWithPols at 2022-11-24 06:40 AM | Reply

Price controls could keep prices down even with high demand. Why not try that rather than impoverishing the bottom half of the income distribution?

The poor always get the ---- end of everything.

Why can't the producers accept price controls that diminish their profits?

Why are the less wealthy always the ones to have to take the pain?

#7 | Posted by Effeteposer at 2022-11-24 02:04 PM | Reply


#3 More properly: Any form of stimulus including debt relief to "households with a higher propensity to spend out of their wealth" would be a step in that direction.
#4 | POSTED BY SNOOFY

Not a good direction. Replacing their money with our money doesn't solve the problem raising the rates, or our money, is trying to solve, it actually exacerbates it.

#8 | Posted by oneironaut at 2022-11-24 02:08 PM | Reply | Newsworthy 1

The poor always get the ---- end of everything.

Kind of the definition isn't?

#9 | Posted by oneironaut at 2022-11-24 02:08 PM | Reply

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