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Inflation.......... ?
- Thread starter Hobo Hilton
- Start date
The money supply shot up in 2020, when Trump was president, and has remained high ever since.
Anybody remember what was happening in 2020?
The results were predictable, but nobody wants to point out the simple truth of what caused it, and nobody seems aware that "prices" are not inflation, which further obscures what is going on.
Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
www.heritage.org
Check out the chart below.
2020 was the year the federal government increased the money supply at the same time that they shut down most economic output.
The effects were felt for years and are still with us.
Look at the pre-2020 and post-2020.
This is not rocket science. If another country did this, and I showed you the chart, and asked you what was going to happen to the cost of groceries in the years on the right hand side of 2020 as compared to the left hand side, what would you say? Nobody wants to give the same answer, however, because it is our country, and politics and bias get in the way of clear thinking.
Anybody remember what was happening in 2020?
The results were predictable, but nobody wants to point out the simple truth of what caused it, and nobody seems aware that "prices" are not inflation, which further obscures what is going on.
Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
The Real Story Behind Inflation
What do you know about inflation? Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Of course, we all know the driver of the quantity of...
www.heritage.org
Check out the chart below.
2020 was the year the federal government increased the money supply at the same time that they shut down most economic output.
The effects were felt for years and are still with us.
Look at the pre-2020 and post-2020.
This is not rocket science. If another country did this, and I showed you the chart, and asked you what was going to happen to the cost of groceries in the years on the right hand side of 2020 as compared to the left hand side, what would you say? Nobody wants to give the same answer, however, because it is our country, and politics and bias get in the way of clear thinking.
Attachments
Where I think the rubber is really going to hit the road is in the next 20+ years with retirement folks. Most people in their 40's right now have almost zero savings, almost nothing in retirement, many won't own their own homes, and pensions are basically extinct. The average 401k balance of 45-55 year olds is about $150k, half of Americans have no retirement accounts at all, add to that the massive increase in health issues in both young and older people, and the quality of healthcare tanking because investment groups buying up the medical industry and stripping it for profits, and it's going to get ugly. Medical issues related to cancer and obesity are quickly impacting younger and younger Americans. Cancer rates are skyrocketing for people 30-45. Early onset cancer rates (cancer before the age of 50) is increasing at 1-2% every year.
Then you have all the kids coming out of school with large student debt, no affordable apartment options, and much higher "average" living expenses than most generations. Now a lot of those "living expenses" are personal choice. When I was growing up in the 80/90's almost no one had cell phones, no one was spending $50 a week at a coffee shop, and many appliances/goods/cars were retained (and lasted) much longer. Now the average family has a $200 cable bill, a $200 cell phone bill, streaming bills, xbox subscriptions, amazon and costco memberships, two car loans and they swap cars every 3-4 years, appliances last a handful of years if you are lucky, and they probably spend $100 a week at starbucks or more if they have a couple kids. $1000 phones for every family member every 2-3 years, and new $1000 iPads, $500 smart watches, neither of which anyone wants after 2-3 years. Many families I know with 3-4 drivers are spending almost $300-500 a month just on car insurance. The list goes on and on. A lot of that pain is created by the consumer that over leverages themselves to have toys, and companies have become masters of manipulating customers with social media and all the information they get on individual buying habits, interests, and all that screen time they get to inundate them with ads. Not to even get into how badly the CPI index is manipulated to keep the # they report artificially low. If a base model Honda Civic increases in price $5k, but it gained features/technology compared to the previous model, it doesn't count toward the CPI, same is true for anything with technology. However the reality for the consumer is the cheapest Honda Civic you can buy just got $5k more expensive.
When I moved into my townhouse in 2016 it was valued at $225k, it's current value is just shy of $500k at 1400 square feet, suggested rent is $2500/mo. Most young professionals I know if they are living in an apartment outside a slum without roaches they are paying $2000 a month for a 2 bedroom, and $1500+ for a 1 bedroom. If they want to live downtown, or somewhere nice, it's more. It used to be rent on a nice middle of the road clean apartment was much lower than a mortgage but now they are similar. I just don't see how younger folks are ever going to put enough $ away to buy housing when rent is just as expensive as a mortgage. It's more critical than every for young people to make sure they get a really good paying job, are smart with their budgets, and put money away early on, however it's also become harder to do so.
I'm really thankful I lucked into a really good job, and my grandparents/parents really instilled in me the importance of saving $ early in my career, but even we spend way more than we should on crap.
Then you have all the kids coming out of school with large student debt, no affordable apartment options, and much higher "average" living expenses than most generations. Now a lot of those "living expenses" are personal choice. When I was growing up in the 80/90's almost no one had cell phones, no one was spending $50 a week at a coffee shop, and many appliances/goods/cars were retained (and lasted) much longer. Now the average family has a $200 cable bill, a $200 cell phone bill, streaming bills, xbox subscriptions, amazon and costco memberships, two car loans and they swap cars every 3-4 years, appliances last a handful of years if you are lucky, and they probably spend $100 a week at starbucks or more if they have a couple kids. $1000 phones for every family member every 2-3 years, and new $1000 iPads, $500 smart watches, neither of which anyone wants after 2-3 years. Many families I know with 3-4 drivers are spending almost $300-500 a month just on car insurance. The list goes on and on. A lot of that pain is created by the consumer that over leverages themselves to have toys, and companies have become masters of manipulating customers with social media and all the information they get on individual buying habits, interests, and all that screen time they get to inundate them with ads. Not to even get into how badly the CPI index is manipulated to keep the # they report artificially low. If a base model Honda Civic increases in price $5k, but it gained features/technology compared to the previous model, it doesn't count toward the CPI, same is true for anything with technology. However the reality for the consumer is the cheapest Honda Civic you can buy just got $5k more expensive.
When I moved into my townhouse in 2016 it was valued at $225k, it's current value is just shy of $500k at 1400 square feet, suggested rent is $2500/mo. Most young professionals I know if they are living in an apartment outside a slum without roaches they are paying $2000 a month for a 2 bedroom, and $1500+ for a 1 bedroom. If they want to live downtown, or somewhere nice, it's more. It used to be rent on a nice middle of the road clean apartment was much lower than a mortgage but now they are similar. I just don't see how younger folks are ever going to put enough $ away to buy housing when rent is just as expensive as a mortgage. It's more critical than every for young people to make sure they get a really good paying job, are smart with their budgets, and put money away early on, however it's also become harder to do so.
I'm really thankful I lucked into a really good job, and my grandparents/parents really instilled in me the importance of saving $ early in my career, but even we spend way more than we should on crap.
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- i'm talking my area,, not 'median' don't give a fk about NY and CA screwing it up for the rest of the nation.
- and NO, 200k was not 2003... there were lots of 45 and 65k homes in 2011 during the bubble. (in my area)
- "There has never been a time in history when an average 25 year old could afford a larger than 2500 square foot home" - i never quoted square footage so that's YOU putting words into people mouths.
price of EGGS are DIRECTLY related to inflation
fuel costs
feed costs
Care to explain why eggs were over 7 dollars a dozen the first 2 years into Bidens economy?
Next you'll try to blow smoke our asses and say, that the rising prices of the egg McMuffins from 2 for 2 to 2 for 5 aren't related to inflation
Here's the biggest LOL on the Fk'n planet
"prices" are not inflation
^^ this guy must be a fact checker for Facebook
GTFO
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Well got to give credit to the bird flue chicken cull for 1/2 the problem on eggs.
But ya sack of layer pellets went north and when you toss in some sunflower seeds and maybe some corn mixed in for the winter, those perfect free range mixed breed layers eggs are getting expensive.
Slaughtered all the roosters at once instead of on demand to save feed, less one fine stud.
Beef prices slaughtered or walking are ridicules. Been using scoop of feed per head, fixing to be counting out cubes per head and that's with plenty of grass for now.
Fixing to be all grass fed, amazingly some dumbasses think that's better.
Take a blind taste test and join reality on good beef taste.
I grew up my younger years on grass fed at the farm, 1960's that's what farmers ate .
Kind of like the package of bacon that's only 12 oz. Some of us are not that stupid, we see this shit going on everywhere.
The dems tell the sheep it's normal and good. The Republicans come in, fix it and the fucking sheep are told prices went up since we started selling 1 lb packs of bacon.
The dems need put down hard and fast.
But ya sack of layer pellets went north and when you toss in some sunflower seeds and maybe some corn mixed in for the winter, those perfect free range mixed breed layers eggs are getting expensive.
Slaughtered all the roosters at once instead of on demand to save feed, less one fine stud.
Beef prices slaughtered or walking are ridicules. Been using scoop of feed per head, fixing to be counting out cubes per head and that's with plenty of grass for now.
Fixing to be all grass fed, amazingly some dumbasses think that's better.
Take a blind taste test and join reality on good beef taste.
I grew up my younger years on grass fed at the farm, 1960's that's what farmers ate .
Kind of like the package of bacon that's only 12 oz. Some of us are not that stupid, we see this shit going on everywhere.
The dems tell the sheep it's normal and good. The Republicans come in, fix it and the fucking sheep are told prices went up since we started selling 1 lb packs of bacon.
The dems need put down hard and fast.
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right there....
shrinkflation, also known as package downsizing, weight-out, and price pack architecture is the process of items shrinking in size or quantity while the prices remain the same.
can a green beans could feed 4, now it barely feeds two. 16oz, to 14, to 12 (lots of liquid, aka water weight). I dug into the freezer and pulled out a 4 year old stick of sausage from Sams's club. It was 3lbs (4.99), the ones Sam's Club sells today are less than 2 lbs. (price is up to 5.99).
My god, and hamburger prices.. and can I get a Amen on bacon. Yea, we see that shit...
Hell, economy is so bad, they can't even do shrinkflation without raising the prices on the smaller amount.
bravo! this is maybe the best summation of the current and prob future road that i have seen. you describe just what my grands are facing. prob never own as rents are = to mortgage or higher. saving for a down payment impossible because of $5 eggs etc. you point out the stupidity of all the high tech,basically useless toys. correct on cars. i had to get a new one because of a totaled wreck. is a 5 yo nissan loaded with all the digital crap that i don't want or need. you have to buy it as no "stripped" models exist. a good part of the cost is gov mandates and all the rest thrown in because people just can't conceive of finding a place without GPS etc. insurance home,health,auto is huge,even for me as a retiree. i can handle it because i have gotten control of my toy addiction. most young were raised without any such control. agree obesity is now the most common body type and health care is just a DR typing on the comp,pushing the latest meds and referring out anything that requires any work. ie if they can't just blow off or ignore any finding they stumble on to. don't even start on environmental degradation and crime. both seem to be on an unstoppable upward climb. the deteriorated international situation isn't helping.
No, the solution isn't to build more houses. In an era of central planning where the central bank chooses the winners and the losers, the solution is to have a sound monetary system and not the current fiat based fractional reserve banking system. There is no free market price discovery.
Most of the world went to pure fiat in 1971 when Nixon closed the gold window (renounced Bretton Woods). He wanted Bretton Woods II that would revalue gold higher than $35 oz. However, Germany floated the marks and other nations followed. The 1973 Petro-dollar agreement created a demand for dollars (Treasury Bills/Bonds) b/c nations had to hold dollars for global trade.
Watch Mike Maloney's Hidden Secrets of Money for free on U-toob and you'll learn the difference between money and currency. If you have time (a little over one hour), go to Thegreattaking.com where there is a free pdf (less than 100 short pages or link to a free U-toob video) to explain how you can be fleeeced of your equites, 401(k) and bank savings/checking/CDs. The author explains how the laws were changed to make sure (per Satan Klaus (Schwab)), "You'll own nothing and you'll be happy."
Most of the world went to pure fiat in 1971 when Nixon closed the gold window (renounced Bretton Woods). He wanted Bretton Woods II that would revalue gold higher than $35 oz. However, Germany floated the marks and other nations followed. The 1973 Petro-dollar agreement created a demand for dollars (Treasury Bills/Bonds) b/c nations had to hold dollars for global trade.
Watch Mike Maloney's Hidden Secrets of Money for free on U-toob and you'll learn the difference between money and currency. If you have time (a little over one hour), go to Thegreattaking.com where there is a free pdf (less than 100 short pages or link to a free U-toob video) to explain how you can be fleeeced of your equites, 401(k) and bank savings/checking/CDs. The author explains how the laws were changed to make sure (per Satan Klaus (Schwab)), "You'll own nothing and you'll be happy."
Todd brought up his historical perspective. Absolutely nothing wrong with what he wrote but I can offer an older perspective.
Back in my days you could flip burgers, wait on tables, pump gas AND walk away from college with no debt. Those were the days before guaranteed school loans. All the latter did was encourage the colleges to jack up tuition cost to maximize what the school could get paid. There was a boom in colleges/university building and younger students graduated with debt.
The middle class manufacturing jobs have fled overseas in search of greater corp profit. Blame David Rockefeller for that idea. Post WW II a guy with a high school diploma can work in a factory, build cars or make Maytag washers, marry, buy a home and raise a family. Those jobs are gone now so when these kids with $100k in debt graduate from college, they become indentured servants who can't use bankruptcy (Dubya's reform of bankruptcy laws meant that school loans cannot be forgiven by bankruptcy) to escape their debt burden. Sally with her degree in women studies flips burgers until she's 65 at which point her loans are paid off and she can start saving for retirement.
Now throw in inflation. If you watch that Mike Maloney series linky you'll understand why we have inflation. We must not b/c of the bovine feces the econ professors said but b/c of the nature of the fractional reserve banking system. It crashes w/out inflation. Sally the student can't keep up with it. BTW, I mentioned the Fed Res picking the winners and losers.
Look up the Cantillon Effect. Those closer to the money spigot when the Fed Res hits the return key benefit. It takes a while for the effect of fresh dollars to be felt so the big boys who get the newly created dollars win b/c they can buy up assets first beffore the dollar devalues. So who were the big winners? Member banks (they bought equity, bought back their own shares) and hedge funds (who bought equity and real properties). The little fish won a little b/c of equity prices and sometimes residential property values. The stock market does not reflect the economy (it is part of perception management) but the pursuit of captial returns and fear of missing out has driven many from safer methods of generaating wealth into the stock market or real property. The only thing the average Joe got was 1) Time & 2) Inflation. Inflation is simply the creation of fresh money (actually currency) without a corresponding increase in goods/services. It's too much money chasing too few things. Period.
If you remember recent history, after the housing bust of 2007 the financial world was on the brink of collapse thanks to MBS (mortgage backed securities) and derivative trading. It survived ONLY because of TARP (troubled asset relief program) and subsequent QE (quantitative easing - nice way to say the Fed mashes down the return key to create more digital dollars). There has been no economic recovery since 2007 and everything has been on life support since. The wheels will fall off when the dollar collapses (good read is Ferguson's When Money Dies). If you believe the recent governent stats about how healthy the economy is, it's because of massive government hiring, overspending and old fashion lies. Nomi Prins has a book (Permanent Distortion) on the subject and the over-leverage of 2008 has minimally increased tenfold.
Here's the lies: the housing market was never allowed to properly deflate. Banks kept homes off the market for fear of them selling underwater of the loan that was foreclosed on. They waited until fresh money went in to reinflate the bubble. Housing prices will deflate (but I can't say with respects to dollar terms). The stock market is used to transfer the risk from the big investment firms to the common man. The main source of wealth of most Americans can vanish when those two things happen. Sidenote: commercial real estate collapsed with the covid lockdown and office vacancies and businesses send employees away to work from home.
If you understand how the fractional reserve banking system works, you'll understand why the US has been funding foreign wars (Ukraine, Israel) includling the Taliban (conflict means lower cost access to resources). Those newly created dollars have to go somewhere and a lot goes the defense industry, graft by politicians and then some to the recipient nation (where more graft happens - we should have learned this from the aid to Republic of China/KuoMinTang during WW II).
I'm not saying don't own your home. You need a place to hang your hat. Rather, I'd shy away from real property (both residential and commercial) unless it's income producing (ranch, farm, timber, mineral, water rights).
It's only a matter of time before it ends and fractional reserve banking works until it doesn't. We're approaching the "doesn't work" moment.
Back in my days you could flip burgers, wait on tables, pump gas AND walk away from college with no debt. Those were the days before guaranteed school loans. All the latter did was encourage the colleges to jack up tuition cost to maximize what the school could get paid. There was a boom in colleges/university building and younger students graduated with debt.
The middle class manufacturing jobs have fled overseas in search of greater corp profit. Blame David Rockefeller for that idea. Post WW II a guy with a high school diploma can work in a factory, build cars or make Maytag washers, marry, buy a home and raise a family. Those jobs are gone now so when these kids with $100k in debt graduate from college, they become indentured servants who can't use bankruptcy (Dubya's reform of bankruptcy laws meant that school loans cannot be forgiven by bankruptcy) to escape their debt burden. Sally with her degree in women studies flips burgers until she's 65 at which point her loans are paid off and she can start saving for retirement.
Now throw in inflation. If you watch that Mike Maloney series linky you'll understand why we have inflation. We must not b/c of the bovine feces the econ professors said but b/c of the nature of the fractional reserve banking system. It crashes w/out inflation. Sally the student can't keep up with it. BTW, I mentioned the Fed Res picking the winners and losers.
Look up the Cantillon Effect. Those closer to the money spigot when the Fed Res hits the return key benefit. It takes a while for the effect of fresh dollars to be felt so the big boys who get the newly created dollars win b/c they can buy up assets first beffore the dollar devalues. So who were the big winners? Member banks (they bought equity, bought back their own shares) and hedge funds (who bought equity and real properties). The little fish won a little b/c of equity prices and sometimes residential property values. The stock market does not reflect the economy (it is part of perception management) but the pursuit of captial returns and fear of missing out has driven many from safer methods of generaating wealth into the stock market or real property. The only thing the average Joe got was 1) Time & 2) Inflation. Inflation is simply the creation of fresh money (actually currency) without a corresponding increase in goods/services. It's too much money chasing too few things. Period.
If you remember recent history, after the housing bust of 2007 the financial world was on the brink of collapse thanks to MBS (mortgage backed securities) and derivative trading. It survived ONLY because of TARP (troubled asset relief program) and subsequent QE (quantitative easing - nice way to say the Fed mashes down the return key to create more digital dollars). There has been no economic recovery since 2007 and everything has been on life support since. The wheels will fall off when the dollar collapses (good read is Ferguson's When Money Dies). If you believe the recent governent stats about how healthy the economy is, it's because of massive government hiring, overspending and old fashion lies. Nomi Prins has a book (Permanent Distortion) on the subject and the over-leverage of 2008 has minimally increased tenfold.
Here's the lies: the housing market was never allowed to properly deflate. Banks kept homes off the market for fear of them selling underwater of the loan that was foreclosed on. They waited until fresh money went in to reinflate the bubble. Housing prices will deflate (but I can't say with respects to dollar terms). The stock market is used to transfer the risk from the big investment firms to the common man. The main source of wealth of most Americans can vanish when those two things happen. Sidenote: commercial real estate collapsed with the covid lockdown and office vacancies and businesses send employees away to work from home.
If you understand how the fractional reserve banking system works, you'll understand why the US has been funding foreign wars (Ukraine, Israel) includling the Taliban (conflict means lower cost access to resources). Those newly created dollars have to go somewhere and a lot goes the defense industry, graft by politicians and then some to the recipient nation (where more graft happens - we should have learned this from the aid to Republic of China/KuoMinTang during WW II).
I'm not saying don't own your home. You need a place to hang your hat. Rather, I'd shy away from real property (both residential and commercial) unless it's income producing (ranch, farm, timber, mineral, water rights).
It's only a matter of time before it ends and fractional reserve banking works until it doesn't. We're approaching the "doesn't work" moment.
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Part of planning for the future is getting used to not “owning” much except what you can carry or load on your shit box. Letting go of many things that aren’t really ours is a stressful journey, but does prepare for most of our future.
Final word: It is not about doom and gloom. If you anticipate & mitigate, you can thrive as hard times can also be opportunity. As the Get Even! author George Hayduke said, "Where there is confusion, there is profit."
OK, I will throw in inflation.
1946 8.3%
1947 14.4%
1948 7.7%
Sally did not work post - WWII, usually. She married. She had kids. She gave them hand me down clothes. Her husband worked. They owned one car, with no air conditioning, if they owned any cars, and he took that car into town, where he met other men and carpooled the rest of the way to work. Sally was stuck at home with the children in a house that had no air conditioning. Sally made meager meals with lots of things like casseroles and bean soup to stretch the family dollar. Electronics? LOL. In 1946 only 8000 households had this enormously expensive luxury item called a TV. More houses had radios. Families entertained themselves in other ways.
That home with no ac was only 817 square feet.
Families were larger then than now, too.
We love to look back at the good old days, but nobody seems to want to remember what things were really like. Folks did not spend money back then like now, because they simply had nowhere near the household income that we enjoy today. Eating out was a rare luxury. Eating expensive food at home was a rare luxury for the middle income person in America, too.
Most of you would scoff at an 817 square foot home for a family, but that is the normal way folks lived.
When I was a small child, I still remember my grandparents living not too differently from that (grandparents who were that post WWII generation, so, no surprise). Grandma's house did not have heat, either, so Grandpa would get the fire roaring in the fireplace while all the grandkids (cousins and siblings all) settled into sleeping bags to read comic books before going to sleep on the living room floor, bellies full of food Grandma baked, much of it from her garden or picked by us (for Grandma to make her Blackberry Cobbler).
Grandma and Grandpa lived frugally and left some money for inheritance down three and four generations, because they saved.
Americans do not believe in saving anymore. They do not believe in frugality.
Savings rate immediately post WWII was 21%
By 1950 it dropped to 12%
It continued to drop with exceptions for quick scares like covid, when it temporarily hit a high percentage before dropping back down to a pitiful single digit number lower than 5%. <--- and that is an average. Many homes have negative savings rates. Many have 0. Some have higher savings rates, such as immigrant families in the US, which offset the profligate spending of native born Americans.
Sort of like the average man weighed 160 pounds in America back then. The average woman is more than that now. More, more, more of everything, even when it is bad for you. Spend, eat, consume, then bitch about politics because it has to be somebody else's fault.
Agreed on student loans for sure, it's allowed colleges to charge whatever they want. As soon as colleges knew that guaranteed loan amounts would increase to cover tuition/board regardless of how much they raised it, they were laughing all the way to the bank. The amount in loans our new hires come in with on average is staggering. However if they play their cards right their salaries will make up for it. I'd imagine most are getting hired with starting salaries north of $90k these days, and can advance that to north of $150k in 5 years if they are good performers, but many are not that lucky. It took a long time to pay my loans off, and to be fair I could have been more budget savy, but so many don't have good jobs to compensate for those loans and they quickly end up in a bad financial spot.
Combine that with kids who have been groomed since they were 5 years old to trust everything teacher/schools tell them, and they walk into a college and get told by the program/finance people that X program has 100% placement and not to worry about the loans cause they'll be making $100k a year in no time and they swallow it hook line and sinker. Many parents these days are not going to make their kids work in school, and most still feel the only way to get ahead is a college degree. Meanwhile a lot of people I know in the trades are making more than many college graduates I know and without $50-100k in loans to pay off. Kids have no concept of how much that debt will put them behind in life.
For giggles I just looked at my undergrad school, if I remember right 20 years ago my total cost per year there was around $8k a year, that was with with housing and food. The current estimate is just shy of $30k depending on the program, that's more than double what it should be based on historical inflation of the dollar over that time. The most amazing part is that now the meal plan costs more $6k than housing $5k.
It's not all bad though, I work with a lot of young very bright, smart engineers and scientists and many of them have good financial pictures they are actually working hard to make happen. However in my experience they are the vast exception among young people.
Combine that with kids who have been groomed since they were 5 years old to trust everything teacher/schools tell them, and they walk into a college and get told by the program/finance people that X program has 100% placement and not to worry about the loans cause they'll be making $100k a year in no time and they swallow it hook line and sinker. Many parents these days are not going to make their kids work in school, and most still feel the only way to get ahead is a college degree. Meanwhile a lot of people I know in the trades are making more than many college graduates I know and without $50-100k in loans to pay off. Kids have no concept of how much that debt will put them behind in life.
For giggles I just looked at my undergrad school, if I remember right 20 years ago my total cost per year there was around $8k a year, that was with with housing and food. The current estimate is just shy of $30k depending on the program, that's more than double what it should be based on historical inflation of the dollar over that time. The most amazing part is that now the meal plan costs more $6k than housing $5k.
It's not all bad though, I work with a lot of young very bright, smart engineers and scientists and many of them have good financial pictures they are actually working hard to make happen. However in my experience they are the vast exception among young people.
Sally Student is largely a 1990s creation. Many women attending college in the old days (pre-Fed Guaranteed Student Loan) didn't have that mountain of debt and in the '40s, many were working for the Mrs. Degree (sexist but true). My aunt told me she went to UC Berkeley in the late '40s for about $11.00 a semester/quarter. She could catch the bus to Berkeley and it was cheap.
How you "save" determines whether you saved at all. John Williams' ShadowStats is more honest report on inflation than what the BLI gives. http://www.shadowstats.com/ Inflation is the hidden tax that destroys your savings, earings and retirement.
If you deposit it into the bank, say BoA, you're paid anywhere from .01% to .04% and you're still losing to inflation (per Williams inflation is 4% to 8%). Your deposit's growth does keep pace with inflation so you lose purchasing power. It's designed that way to encourage people to chase the returns and in so doing, accept greater risks (and accept the risk transfer from the rich). Additionally, depositors are exposed to The Great Taking.
What is that? The Dodd-Frank Act which followed in the wake of TARP redefined the depositor as unsecured creditors who stand second in line for funds deposited in the bank. The bank owns the deposit thanks to Dodd Frank (and don't mention FDIC b/c they can't possibly cover all the savings). On 10/24 the depositors at the First National Bank of LIndsay all got a haircut (ala Cyprus). Anybody who had over $250k lost that amount (unlike SVB where Yellen said reimburse everyone including foreign depositors). Europeans have the same issue about bail-ins and the Chinese (Workers' Paradise and not Taiwanese Chinese) can't withdraw their funds that they deposited (financial repression). It's global (and part of Satan Klaus Schwab's plan for us to own nut'n and be happy).
The same may be said of your 401(k) and brokerage accounts where the vast majority of Americans squirrel away their wealth. UCC puts the secured creditors ahead of the unsecurred creditors (us) and unless you direct register your shares OR take delivery of the stock certificate, you are exposed to rehypothecation (remember MF Global and PFG Best?).
Concur with you Malum Prohibitum that people spend too freely. That's the problem with credit card, desire for immediate gratification instead of deferred gratification. In the olde days when you wanted that big radio, new refrigerator/freezer or television, you paid on installments and once it was paid off, the dealer allowed you to take it home. Now! and I don't wanna wait! Cinema, TV and social media play a large part along with the "keep up with the jones' and Americans mistake material trappings for signs of success. In the media you see twenty-somethings living in a big house with lotsa loot but no one ever figures out how they paid for it. Sidenote: China has a lot of fake "social influencers" who pretend their rich but are yuan/renmenbi less. LOL.
People must save but as mentioned, how you save determines whether you saved at all.
Sidenote: savings are important for building the economy. Banks make loans to small businesses and small businesses hire people. No deposits = less loans = less small business = less employment. The government should not be in the loan business (think Bathhouse Barry's failed Solynda) or bailing out failed businesses (that started with Penn State RR). Capitalism allows for failure and chrony-capitalism (which is what we have) socializes the losses. Because of inflation and exposure to asset forfeiture, this just isn't the environment to keep your earnings in the bank.
I encourage people to go the the link above and when you're done, check out the Hidden Secrets of Money series that is free on U-toob. What took me two years of book reading to learn is explained in those ten, simple lessons.
Do they want us to have a high savings level? Will our stock evaluations change if instead of only a few people being smart with their money, the entire country penny pinches and puts their money into investments? Will next quarter's er beat expectations if we all did that?
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