The Fear and Loathing of the One PercentSubmitted by go213mph on Wed, 08/08/2012 - 19:27
REMEMBER...the 1% are getting all this money to hoard FREE from the FED. And the offsetting accounting entry to account for this FREE money goes against the national debt which WE the taxpayers have to pay back. We get bent over and robbed and then our children and grandchildren have to pay back what has been stolen from us...with interest. It's maddness!
Are they the whiny rich? Or besieged job creators?
Whatever you call them, and whatever your politics, there is no doubting that the One Percent is on the defensive – culturally, financially and psychologically. And now a new poll shows that their fear and lack of risk taking may be imposing real financial costs on the economy.
The 2012 Survey of Affluence and Wealth in America, from American Express Publishing and Harrison Group, finds that One Percenters are hoarding three times as much cash as they were two years ago. Their savings rate soared to 34 percent in the second quarter of 2012, up from 12 percent in 2007.
Higher savings would normally be good for the economy. But not now, when capital is needed to invest in growth and jobs. The One Percenters put 56 percent of their available cash into savings accounts and money markets in 2012 – that’s up from 24 percent in 2007.
They’re investing just 44 percent in financial markets – down from 76 percent in 2007. More One Percenters say the stock market is “a real risk” rather than a “real opportunity.” That’s a big switch from just last year, when 62 percent said the market was an opportunity.
In other words, One Percenters used to save less, and invest more. Now they’re “basically stuffing money under the mattress,” said Jim Taylor, vice chairman of Harrison Group.
That also means they’re spending less – on everything from traditional luxury to second homes. Fully 82 percent said they would spend more if they had more confidence in the future.
“This has resulted in people managing their risk to a ‘no loss’ position rather a ‘real gains’ position,” Taylor said. “That’s not the great tradition of American investing.”
One respondent in the study said “My savings rate has gone up and I’m not spending, which I realize is bad for the economy ... but I like having a wide moat around me so that nothing can bother me.”