Evil people who hoard their money

Warning warning! Don't open a savings account or you could be accused of "hoarding" your money!

Yes, that's right. A frugal virtue handed down for centuries is now being vilified by the Federal Reserve. According to this article, "One of the great mysteries of the post-financial crisis world is why the U.S. has lacked inflation despite all the money being pumped into the economy. The St. Louis Federal Reserve thinks it has the answer: A paper the central bank branch published this week blames the low level of money movement in large part on consumers and their 'willingness to hoard money.' The paper also cites the Fed's own policies as a reason for consumers' unwillingness to spend."

Unwillingness to spend on what? Big screen TVs? Caribbean vacations? Diamond earrings? If they don't want us to be thrifty and save, what should good American citizens spend their money on that would meet with the Federal Reserve's approval? Certainly not "beans, bullets and Band Aids" like the preppers do – that would be bad. Baaaad. Bad and paranoid.

The Federal Reserve seems genuinely bewildered that people living in an uncertain economy don't want to blow every last penny on useless consumer items and would rather stash their spare cash in a savings account (or under the mattress for that matter). "So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?" economist Yi Wen and associate Maria A. Arias asked in the St. Louis Fed paper. "The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money." [Emphasis added.]

In days past, this "hoarding" of money would be termed a "savings account," and every child over 5 years old was encouraged to have one. Smart adults socked away (oops, "hoarded") a sizable percentage of their income for rainy days, emergencies and retirement. But now that's bad! Baaaad!

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The unspoken implication, of course, is that those greedy evil middle-class Americans who insist on (gasp) saving some of their hard-earned income for their future are the ones responsible for taking down the economy by "slowing the velocity of money." In case you didn't get the point, the article added, "The reason that inflation hasn't kept up with gains in the money supply simply has been that people are sitting on cash rather than spending it."

You see, surely it can't be the government's fault that our economy is teetering on the edge of another great depression. No, it's Joe Sixpack's fault for "hoarding" his money. Gosh, how awful.

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The use of the term "hoarding" is no accident. Hoarding has ugly connotations. It implies accumulating more than one's fair share. It implies that thriftily socking away extra nickels and dimes into a rainy-day account will prevent others from doing the same thing. It implies unfairness since some people save and others don't.

But hoarding in the true definition of the term means "to accumulate money, food, or the like, in a hidden or carefully guarded place for preservation, future use, etc." There is no negative connotation. In fact, it's wise to accumulate and guard something valuable.

We see this same scenario in nature all the time. Why do squirrels hoard nuts? Why do bears accumulate fat in the fall? It's because they know something is coming (winter). It's only modern humans who believe "hoarding" (being prepared) is not necessary, that nothing bad could ever happen, or that someone else is responsible for taking care of them during an emergency.

As a blog reader put it, "The insistence of the federal government to use the term 'hoarding' in this report should seriously scare everyone reading this article."

But wait! There's more! It seems if you have the temerity to deposit less than $10,000 at a time into your savings account, your assets can be seized by the IRS on the imaginative grounds that you're trying to hide drug money. This article reports how a restaurant owner lost her life savings when "the IRS interpreted her small deposits as an attempt to avoid triggering a required government report."

Um, perhaps it never occurred to the IRS that most people don't have chunks of $10,000 at a time to deposit? I know it may come as a shock to rich bureaucrats, but the vast majority of Americans can do little better than "hoard" metaphorical nickels and dimes because that's all they can spare between mortgage payments and tax bills.

So who is truly hoarding money? Take a gander at this graph to see how JP Morgan's loans have declined but its assets have increased since 2004:

Essentially what this means is it's more lucrative for the banks to HOARD their money or stockpile treasury notes than to loan it out.

And yet slimy government officials will seize assets of small restaurant owners for no other reason than to pad their coffers, while whimsically impoverishing hardworking middle-class people. Mom and pop savings accounts are a pittance next to what the big banks are doing.

Methinks the IRS is targeting the Joe Sixpacks of the nation because it knows good and well Joe doesn't have the money to fight back. So little by little, the IRS and similarly benevolent alphabet agencies can sweep across the country, seizing assets here and there and depriving people of a lifetime of hard word and thrift with no recourse and no due process.

The article confirms this suspicion. "Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up."

And the responsible people who DO "hoard" their money are accused of nefarious activities, chided for being selfish, or unlawfully deprived of their savings through government confiscation (particularly if you have the audacity to be conservative).

So tell me … who's more evil? The people who save, or the people who steal?

Folks, I urge you to do your patriotic duty and empty your savings account! Don't be a hoarder, be a spender! Give a single-handed boost to the economy and ensure that you, too, will face disaster if you lose your job ... unless you go on government assistance! Wheeeee!

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