The folks at the St. Louis are out with a research paper, as reported by CNBC, claiming that U.S. consumers are hoarding cash and that has made the Fed's QE efforts infective. I guess the economists at the Fed don't take a look at their own data.
The personal savings rate has remained largely flat over the last five years. So unless consumers are shoving cash under their mattresses. I guess the economists also forgot to look at the banks reserve holdings, which have exploded over the same time frame.
This is nothing to the fact that financial inter-mediation makes the whole argument (that is unless the cash is literally going into mattresses) of cash on the sidelines, savings as negative, reserves lockup, and hoarding cash a red herring. But great job trying to make the argument that consumers are hoarding cash.
The personal savings rate has remained largely flat over the last five years. So unless consumers are shoving cash under their mattresses. I guess the economists also forgot to look at the banks reserve holdings, which have exploded over the same time frame.
This is nothing to the fact that financial inter-mediation makes the whole argument (that is unless the cash is literally going into mattresses) of cash on the sidelines, savings as negative, reserves lockup, and hoarding cash a red herring. But great job trying to make the argument that consumers are hoarding cash.
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