Tag Archives: 2009 financial crisis

Stacy Summary:  So, Bastille Day is mostly over.  No guillotines or pitchforks were seen.  And now the French are out dancing to bad music in the square!  We have a great show coming up tomorrow On the Edge.  I feel it in my blood!!  The stories this week are so good and Karl Denninger seems to be firing on all cylinders these days.  Seriously, in terms of headlines, here is so much to keep on top of and y’all have been just amazing at finding some great stuff!  Here are the afternoon headlines . . . sorry @Mike2liverpool . . . still bad news!

• The Economy is Even Worse Than You Think (h/t @maxkeiser)

• This crisis is not over (by Tim Lee who appeared in Money Geyser)

For the US, the economy’s big problem is a lack of saving. There has been excitement about the personal savings rate rising to nearly 7 per cent. However, the rise in personal savings has been at the expense of government savings. The government has simply borrowed and given money to people. In the first quarter the national net savings rate remained sharply negative, at -1.4 per cent. It is unlikely to have improved much in the second quarter.

A negative national net savings rate means any growth of capital stock has to be financed from overseas. This does not provide a promising background for longer-term economic growth. The US current account deficit (which is equal to the requirement for external finance) has improved markedly, but this has occurred as investment has collapsed and not because of any rise in savings.