As I listened to parts of the speech by Fed Chairman Ben Bernanke, here are some of his comments along with my translation;
1) "Although there are critical public-policy reasons to get U.S. consumers to save more money, no easy way has been found for the federal government to increase private savings."
Translation: Our savings rate is an embarrassment. Obviously the public likes to spend more than it saves and eventually this will be a drain on our economy in the years to come. So, if you can't force yourselves to save, we are not going to provide you with more easy money so you can dig yourself a deeper hole.
2) "Unfortunately, many years of concentrated attention on this issue by policymakers and economists have failed to uncover a silver bullet for increasing household saving,"
Translation: We throw you guys a bone, drive interest rates into the ground, and you take the money and gamble on real estate thinking they are lottery tickets. We give you cheap money to buy a home, and you use our easy money policy to speculate with, and buy two or three homes hoping to strike it rich.
And if you think we are going to lower interest rates again just so you can go out and spend again like wild Indians, you can forget about it. We only lower rates when the economy is in deep trouble.
3) "The aging population will be the most important factor shaping our economy and society in coming decades. Preparation for the impact of these demographic changes must start quickly.
"I suspect that many people would agree that a fair outcome should involve the current generation shouldering at least some of the burden, especially in light of the sacrifices that previous generations made to give us the prosperity we enjoy today,"
Translation: If you keep spending money and keep gambling on things you know nothing about, you are not going to have anything left to retire on. You need to learn to save money like your grandparents did or the only thing you will be able to live on is social security.
4) "By saving more today, we can reduce the future burden of demographic change. Saving more requires that we consume less or work more.
Translation: You can lead a horse to water but you can't make him drink. Forget about the Paris Hilton sunglasses and the Donald Trump ties, and get busy being yourself and save. If not, we are going to raise the retirement age for social security, and you'll be bagging groceries at Publix at age 75.
5) One idea to boost savings that doesn't receive much attention, Bernanke said," was better financial education that helps people understand alternative saving vehicles." But it is the lack of savings by consumers that continues to puzzle economists.
Translation: I realize that a big home and a new fancy BMW will impress your friends, but you need to discipline yourselves to live within your means. Heck, even economists can't figure you guys out. Get with the program now or all your friends will say in your latter years is "Big hat, no cattle."
