The Myth of the Global Savings Glut

The Myth of the Global Savings Glut - at www.moneyweek.com - the best of the international financial media

In his testimony to the US Congress on July 20, 2005, Mr Greenspan declared it quite likely that the world is currently experiencing a global savings glut. Agreeing with Ben Bernanke, the man tipped to succeed him as chairman of the US Federal Reserve, he mentioned this glut as one of the factors behind the so-called interest-rate conundrum - i.e., declining long-term rates despite rising short-term rates.

Having read a lot from the Fed's luminaries, we aren't surprised by their attempts to distinguish between rampant global credit excess and a global savings glut.

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