Saving in the Economic Crisis?

Question

I know we should save our money, but it seems kind of counter-intuitive since our money is being devalued, and with our fiat monetary system, it seems like saving money won't help TOO much. it might help us pay our bills, but in the end, we are going to be all poor if the dollar means nothing.

So what do you think, save or not save?

Answer 1

save. Its better than having nothing and spending it all.

Answer 2

What a poor question, it's unanswerable

Ever heard of the paradox of thrift?

Answer 3

Depends on how much those whom you trust your money for saving earn on them and how much they pay to you - banks earn interest on your money by lending it further and if they keep on average 90% of this interest with relatively low risk - then I would better chose not to save (or find someone else if there is such low-risk/high trust alternative).

All in all in current situation it's not a question of saving or even earning but more right would be - it helps you to slow down devaluation speed of your accumulated wealth stored in money . So main goal here is to chose slowest devaluating asset but this should be balanced with risk level too - and bank interest rate does this job a bit.

And it's almost impossible now to find feasable solution which will cover not only inflation (devaluation of your wealth/money) but whould bring you proift. current process is sort of mass devaluation due to accumulated risks and consequent loses in economy - so many big players do all the best to transfer these loses to somebody else.

From perspective of economics solution is very simple - if you have higher benefit from spending today than tomorrow (don't miss devaluation effects and interest rate effect) - then spend today. If you will have greater utility from spending tommarow rather than today - then spend later. Combinations are also possible - for instance part spend today and part to save.