A study by the University of Maryland’s Robert H. Smith School of Business found that the “denomination effect” is indeed real. It turns out that carrying larger bills mitigates overpaying. So be sure you ask for a hundee instead of five $20’s.
This research will be published in an upcoming issue of the Journal of Consumer Research. This follows prior research finding that consumers spend more when using credit cards instead of cash.
The Chinese government, the biggest buyer of U.S. debt, expressed concern about American deficits and its impact on U.S. Treasury obligations – a budget that will raise the national deficit to nearly $2 trillion dollars. That’s $2,000,000,000,000.
Bernanke views this intervention strategy as critical and necessary to avert a deeper downturn. But as you know, spending money you don’t have can come with it some dire consequences.
This economic jump start strategy of spending America out of this downturn will need to be repaid one day, hopefully from economic growth and fiscal restraint. But deficits generally spawn higher inflation, higher interest rates and a weaker economy.
Posted in Industry, Interest Rates, Savings
Tagged bernanke, budget, chairman, china, Debt, deficit, economy, fed, federal reserve, government, inflation, interest rate, treasury
While roughly half of consumers plan on having money left over after paying their bills in February, likely a result, at least in part to mitigated fuel prices, the increase in money left over has not resulted in a buildup in reserves.
In fact, over 43 percent said they can only last a month or less maintaining their current lifestyle if they suddenly lost their income and only 21 percent said they had enough reserves to last six months or more.