I found the graphic at the top of this post at TCW so charming I started reading the article. I got to one sentence in the middle of the post and just couldn’t get past it.
I’ve written about this in the past. Sometimes I find something so egregiously wrong I just can’t read any farther. Here’s the sentence:
Consumption now is always prioritized over consumption later, which is why interest rates have been positive for centuries.
That’s either wrong or confusingly worded. What is true is that all investment is consuming less now in order to consume more later or, said another way, positive interest rates are offered as incentives. But here’s the problem:
| Country | Personal Savings Rate |
| Switzerland | 34.8% |
| United States | 4.6% |
Get it? The Swiss are consuming so little now it’s threatening Switzerland’s economy now. The Swiss central bank is so desperate it’s imposed a relatively high 1.2% negative rate of interest. Will it work? It’s the first time it’s every been tried. Who knows?
