America certainly does not have a savings glut.

The global savings glut is the result of this perverse relationship.

American officials have long bemoaned China s saving glut as a major source of global instability.

Neither would it have stopped the global saving glut from turning into a ticking time bomb for the world economy.

But what the world economy is facing is not a savings glut, but an investment deficiency.

US Federal Reserve Board Chairman Ben Bernanke s notion of a global savings glut is a commonly cited explanation for falling world interest rates.

Ben Bernanke, the US Federal Reserve chairman, once famously pinned the whole US current account deficit on a global savings glut.

Indeed, it is misleading to term this situation a savings glut, for that would imply that countries running current account surpluses should reduce domestic incentives to save.

And the rest of the world? A global savings glut would suggest that rebalancing the world economy requires policies to boost America s savings rate and to increase non US households consumption.

First and foremost, there is the global savings glut, an idea popularized by current Federal Reserve Chairman Ben Bernanke in a 2005 speech.

But economists disagree on why we have the glut, how long it will last, and, most fundamentally, on whether it is a good thing.

The fires of the US sub prime mortgage crisis were stoked not just by domestic regulatory failures, but also by a global saving glut, which sent banks on a wild goose chase for yield.

If the US is unable or unwilling to run the required deficits, the global economy will flounder in a savings glut of low demand and cheap capital until another alternative emerges.

The natural interest rate was low because, as the Fed s current chairman Ben Bernanke explained at the time, the world had a global savings glut (or, rather, a global investment deficiency).

Automatic Savers

Some blame a global savings glut for this state of affairs, and call for less thrift. But if we were at full employment, we would recognize that the world still has mammoth growth opportunities, and to sacrifice future growth for current well being is a second best choice.

The puzzle of the global savings glut may live on for several years to come.

It feels like we're all suffering from information overload or data glut.

America s Saving Surprise

Japan s Savings Crisis

Savings rates shot up.

Demand savings accounts

Term savings accounts

Saving. A domestic saving rate in excess of 50 has served China well.

Some of them elect not to save.

US Federal Reserve Board Chairman Ben Bernanke s notion of a global savings glut is a commonly cited explanation for falling world interest rates.

America has a savings deficiency, not a glut.

Both the savings shortage and savings glut hypotheses confuse accounting outcomes with causes.

These days the Chairman of President Bush s Council of Economic Advisers, Ben Bernanke, likes to talk about a global savings glut that has produced astonishingly low real interest rates around the world.

There is a glut of film, the quality has to be raised, they need to go to the next level, but I m optimistic.

There is a glut of film, the quality has to be raised, they need to go to the next level, but I'm optimistic.

Balancing China s High Savings

Saving more today is not an option.

Now in the financial savings world,

Most countries have introduced some form of forced savings (such as compulsory contribution to pension and provident funds) and provide tax incentives to stimulate long term household savings.

The problem of current account imbalances is closely linked to the existence of a world savings glut.

In other words, the government s negative saving is being financed by the private and household sectors positive saving.

America s Saving Rate and the Dollar s Future

Too Much Saving, Too Little Investment

Those who have kids, you teach your kids to save.

They were talking about Exxon Valdez, and that there was going to be a glut of oil tankers because of the insurance industries.

Nine out of 10 either cannot save through their 401(k) plan, decide not to save or don't decide or save too little.

Ben Bernanke, the Chairman of President George W. Bush s Council of Economic Advisors and a likely candidate to succeed Alan Greenspan as the Federal Reserve s chairman in January, has called the decline in real interest rates over just the last decade a global savings glut.

Saving may also take the form of individual contributions to retirement accounts or employer contributions to corporate saving plans.

Shlomo Benartzi Saving for tomorrow, tomorrow