If you’re over 40, your grandparents may have been born in the 1920’s and 1930’s, which means that that their spending and saving habits were born of the Great Depression. They may have been frugal, and thrifty- and they, or your parents, may have been quick to point to their behavior being, conscious or subconsciously, resulting from the Great Depression, and how things bad things can suddenly turn the wrong way for the nation.
If the vaccine, or any of them, are effective, we will see a growth spurt in this country- in this world- like we’ve never seen. Mostly based on travel, food, experiences- life!
But then … how can any reasonable person- and reasonable parent- not begin a new pattern of saving- one greater than ever executed or anticipated- knowing full-well, from first-hand experience, that a virus and a pandemic can, very easily, be right around the corner.
For those of us who are in our 50’s- what if another pandemic strikes when we’re in our 70’s?
Just from China, alone, this country has suffered 4 pandemics in the past 70 years: 1963 Asian Flu; the 1968-1969 Hong Kong Flu; 2002 SARS, and, most recently, COVID-19.
We now know, from first hand experience, that a germ, a pathogen, a flight from Asia- and it can all be shut-down in a heartbeat.
How can the saving’s rate not rise from here for any thinking person?
The combination of an aging society, lower growth, and a pandemic influenced consumer can create a far higher savings rate than previously expected, which could mean a flat yield curve- and a desperate and herd-driven hunt for yield- and low yielding safe haven investments (Treasuries and investment grade credit)- that lasts forever.