FR Chair Bernanke:lousy investment returns(housing)leading to more saving?

[papau]

American households could start saving more if the housing market
starts to cool, Federal Reserve Chairman Ben Bernanke told a group of
bankers yesterday. "It will be less the case that families will
perceive that they don't need to save because their home equity is
growing fast enough. That will over time induce a somewhat greater
willingness to save on their part," he added.
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WELL - I guess that is good, in a GOP sort of way ...but I do not see the positive.

[Sammy Pepys]

1. Sounds like a stretch.....

..but I can see where he's going with it....especially if interest rates keep going up.

[papau]

2. making lemonade out of lemons :-)

:-)

Of course most folks have little savings - main/only sizable asset is house.

Just might be a reverse wealth effect to worry about?

[Sammy Pepys]

3. Reverse wealth effect?

Perceived poverty? :D

[papau]

4. and therefore decreased consumption? -I believe quite possible

:-)

[Warpy]

5. I guess that damn fool hasn't discovered the effect

that inflation is having on stagnant and declining wages, has he?

Nobody's going to save a dime they have to spend to keep body and soul together and enough gas in the car to get to and from work.

That's the problem with having these rich men try to run an economy. They're totally clueless.