US Savers

There has been a rising fury over the paltry returns available to US Savers. The concept of financial repression is now common cocktail party chatter. The WSJ reports the numbers like this: Q3 2008 returned 1.42T to savers compared to 946B in Q4 2011. The 600+ "missing" millions is now viewed as "repression." More accurately, the gap is a Boomer entitlement fantasy.

The narrative goes like this: We all own stocks and real estate and seamlessly work our way to the coast and into 5-6% mid-belly Treasury and municipal  securities. Whoops-a-daisy, a funny thing happened on the way to Del Boca Vista Phase 2. So, is this hiccup on the Yellow Brick Road "financial repression?" Interestingly, many of the loudest repression voices are also vocal opponents of government entitlements. From drug benefits to higher yielding "risk free" investments, Boomers exhibit an affinity for I, Me, Mine socialism.

The other characteristic I garner from financial repressionists is they feel compelled and/or helpless but to participate in the oppression. In fact, it is a choice. The US Saver is a marginal entity. Government intervention in the market and the risk free rate are worthy topics for discussion. The trade off is easy to grasp: If its backed, it gravitates toward zero. If you want more, you take on the risk. Rise up and break free from financial repression.

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