A loyal reader sent in the following article from Newsweek, Tight-Fisted Is Back In Style. A perfect opportunity to look at a positive light given the grim economic climate. While the shift to thrift is natural in difficult times, it is this embracing of savings that will save us from the perils of financial collapse.
Already, once spendthrift Americans have hiked their personal saving rate from near zero, where it’s hovered for several years, to almost 3 percent in November. Merrill Lynch chief economist David Rosenberg expects the rate will soon rise to 8 percent and beyond, levels last seen 20 years ago.
In historically thrifty countries like China and Germany, high saving rates have already drifted even higher. China’s savings rate of 20 to 30 percent is creeping even higher. In Germany the savings rate has hit a 15-year high of 11.4 percent of personal income and is expected to rise to 12.5 percent next year, according to the German Bundesbank.