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Investors (Suckers) Say They Have Things Under Control

Written by Gary North on April 3, 2013

A recent survey by Fidelity, the mutual fund company, reveals that people say they have reduced their debt, are saving more, and they are confident that they are on the road to a safe, secure retirement.

This was heralded as a new era for investors.

Do the facts in the report confirm this? No.

Today, 56% say they are confident about the future. This means that 44% aren’t confident.

Today, 42% say they have increased their tax-deferred retirement savings. This means that 58% haven’t.

Today, 55% say they are better prepared for retirement than in 2007. This means that 45% don’t think they are.

Today, 42% have increased the size of their emergency fund. This means that 58% haven’t.

We are asked to believe that people’s personal savings rate is up since November 2007, the month before the recession is said to have begun. Yes, it is — by a percentage so tiny that it is barely visible. The rate of personal saving increased during the recession, then fell, then increased again, then fell again. It is now just about where it was in late 2007. “No problem! Happy days are here again!”

Once again, Americans are not saving.


This chart indicates that the people who took the survey were either lying through their teeth or were not representative of the American public.

Meanwhile, the suckers are betting on bonds as their retirement hope.

One of the most pronounced changes in investor behavior since the crisis has been the growth of savings invested in bonds and bond mutual funds. Bond funds have attracted more than $1 trillion in net deposits since 2008, while money has been pulled out of stock funds for the past six years in a row. Bonds typically generate smaller long-term returns than stocks, but with less chance of short-term losses.

This will ruin them in the crash in the bond market that is now close to inevitable, given the $1 trillion a year of the Federal Reserve’s purchase of government bonds. Rising price inflation drives down bond prices. These people are being set up by Bernanke for a huge loss.

Repeat after me: “Price inflation kills bonds.”

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2 thoughts on “Investors (Suckers) Say They Have Things Under Control

  1. John Littlefield says:

    You got that right bonds are now waiting for a crash.

  2. Texas Chris says:

    Bonds have been on the edge for years. Only an insane ignoramus would be in bonds right now.

    "The fool and his money are soon parted."