You need to go back to Bernanke's speeches when he said Americans don't save enough..... You need to save more so it will be worth much less when you actually need to use it. Or something like that....
Exactly! WTF. The public doesn't save enough? Why should they, when they get 0% interest on their savings and their money is eroding away to inflation. The only logical thing to do is take out cheap money on loan and blow it as fast as you can. But I kind of think that is what they are getting after anyways.
There is no incentive to save here in america the reason is that most of the entire population in the US only knows how to consume, the only ones that are great at saving from what I have read are the Chinese. Aside from that why would they give you the incentive to save when they know 70% of the US GDP comes from consumer spending.
It's not in the short term interest of the economy for the public to save. If banks think rates will be higher in the future and the public is saving then all the money will be left in checking accounts with banks then sitting waiting for higher rates to lend at. Instead everyone knows that higher rates aren't in the cards and people will start spending and investing and banks will start lending. The velocity of money will improve and we can start seeing real growth.
So hopes Bubble Ben. Furthermore, what was that heaping pile of bs, he threw out on 60 Minutes a few years back about "being ready in 15 minutes" to raise rates if needed. Instead, we're getting this jive about "years" of ZIRP as if there is no downside to this monetary approach.
This has already been done in Japan as others have posted, however it was inflationary for equities. Quite the opposite!
i dont even see what the surprise is about the statement is... did anyone expect anything different? they seem shocked by his statement on cnbc