Gained globally, screwed locally

While the graph looks healthy and there has been a lot of money saved by households, an estimated one third of them have zero savings -and have bought nothing of consequence to support themselves past the March cutoff. Almost 50% of the rest aren't planning on dipping into their savings to consume as they see the future as too uncertain, leaving 20% to carry the economy - as if they are going to be the ones buying the kinds of things that help.

In the US, the bottom 60 per cent of households by income have burned through around $500 billion of their pre-pandemic savings. At the same time, the top 20 per cent have built a veritable king’s ransom of around $1.75 trillion in savings made since the pandemic began.

So, as predicted and expected and was bloody well obvious for anyone paying attention, the rich have expanded their wealth including their savings massively in the last year, while the bottom sixty percent have retracted. I emphasized the "bottom" part because 1/6th of 60% is actually the bottom of the top. It is ridiculous.

Some people will say "serves those poor people right" and in some way this is true, as for example, the consumer good markets are booming as people are spending their incoming money on entertainment and household products. Also in Australia, millions of people drew massive amounts from their retirement funds because they were allowed due to the "exceptional" circumstances in order to cover their expenses. The withdrawals supposedly correlating to a 65% increase in consumer spending on unnecessary consumer goods in the following month of the withdrawal. So, many Australians have spent their income, spent their savings, spent their government handouts and spent large chunks of their retirement funds.

The problem is, that while the top 20% might be pretty flush with savings, the way they spend their money is quite different to the rest, as they are more likely to invest it -and spend it on goods and services that don't actually help the economy that much. The average person however, they spend their money locally and support businesses in their area, creating demand for goods and services, which also means jobs in the area - the kinds of jobs that hire locals.

As I have said several times since the start, this has been the largest wealth transfer that has ever taken place in the history of the world and it has driven massive sums of money to the top of the wealth pyramid, where the richest people and corporations on earth keep extending their lead and widening the divide between the rich and poor.

I have found it quite incredible that so many people have been in the support of "free money" without recognizing that the distribution of what is handed out has been used to milk it back into the hands of the wealthy. It is a type of global money laundering scheme, where the wealthy can't be blamed, because it passed through the hands of the poor first. With so many local businesses locked-out of the economy, the only place the average person could spend their money was through the large companies with web presence and who's brick and mortars were exempt from closure. Lots of money pushed into the economy, only a handful of places to spend it.

We do bring this upon ourselves though, as we are the economy, all of us. It is easy enough to complain about the banks and the rich, but we do not help ourselves through our own activities. Just think how hard it has been to get people into crypto or to post consistently on Hive - the average person only want improvement if it doesn't have to be them to do the improving. Because an economy is all about participation and supply and demand, it has to be us that participate in the improvement because thus far, those who have been actively manipulating it, aren't doing it for the sake of improving global well-being. I think it is like most things in this life, "no one is going to do it for you"

At least for free.

It is going to be an interesting few months in Australia, as the handouts stop and people who have only managed because of them, now have to rely solely on their own earnings. With many not investing into generative assets and with local businesses suffering from lack of patronage, it looks like it is going to get messy. Perhaps the government will inject more cash in and kick the can down the road, while widening the wealth gap even more.

I am guessing there are many people in Australia hoping for more handouts, without thinking how the can is sitting outside their home.

Taraz [ Gen1: Hive ]

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