The rate of U.S. household consumption is likely to fall from its current level, causing the saving rate to rise to about 6 percent of disposable personal income from nearly 5 percent in 2009, the study found.
The next expansion will be sown from the seeds of current and future savings rather than devaluation. Unfortunately, currency devaluation discourages savings by penalizing idle cash (cash being devalued). This makes economic depressions, defined as periods of reduced consumption and increased savings, long and difficult.
Personal Savings to Income Ratio:
Source: reuters.com
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