I pub­lished a post yes­ter­day quot­ing Richard Koo, chief econ­o­mist of Nomura Research Insti­tute and author of Bal­ance Sheet Reces­sion, as say­ing Amer­i­can con­sumers are suf­fer­ing from a bal­ance sheet prob­lem and will not increase con­sump­tion until their per­sonal finances are back in order. The chart below, cour­tesy of Clus­ter­stock, leaves scant hope that indi­vid­u­als will stop sav­ing and start spend­ing again any­time soon.

“For one thing, we’re way below the per­sonal sav­ings rate we saw in the early 70s, let alone the sav­ings rate in the pre-Greenspan era. With the recent wealth shock and the aging pop­u­la­tion, there are a lot of folks eager to hold on to every last dol­lar they’ve got,” said Clusterstock.

Source: Joe Weisen­thal and Kamelia Angelova, Clus­ter­stock — The Busi­ness Insider, Sep­tem­ber 30, 2009.

Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.

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