The Teutonic Saving Puzzle
I recently read somewhere that the so-called Teutonic saving puzzle can best be represented by using the formula
W(t) = (l + r(t)) W(t-1) + Y(t) - C(t)
where Y(t) represents the disposable labour and transferable income and C(t) the consumption expenditures.
I couldn't agree more. Nor could you, I'm sure. But let me try and explain all of this using more simplistic terminology, if you don't mind, just for arguments sake.
The Teutonic saving puzzle is indeed puzzling, but I think I can break it down into two fundamentals: 1) The Germans save their asses off. 2) Contrary to popular belief, they DO consume (and buy just about anything their hearts desire, too), although obviously not in the same way that the rest of the world does.
You see, they are frightfully frugal and terrifyingly tight-fisted and anything they buy has to be a minimum 40% off the already discounted price and they prefer to pay cash so they can squeeze out another discount for having done so and then they go home and toss and turn at night because they probably could have gotten another 5% off at that other discount place across the street and now they can't stop thinking about how their savings account(s) are down to levels only about ten to twenty times higher than anything the likes of you or me could ever possibly hope to see in a lifetime.
Well, at least that's the way it is with me (if you ever want to read a really sad book, just give me a call and I'll show you my Sparbuch = savings book).
None of this is all that puzzling, you see. The puzzling part is the fact nobody else other than the Germans, it seems, has figured out how to actually do this. I mean, they seem to create money ex nihilo or something. They don't like credit cards, they don't like loans (people pay cash for houses here sometimes, I swear), they don't like paying "a fair price" for anything if they don't have to and yet... They have everything they want and/or need. And still get to keep their savings, too, I mean.
That's why it's ridiculous to try and figure out the Teutonic saving puzzle using a formula like that up there. There's no way to properly factor in the black magic.
Comments
Clarsonimus,
just to get things straight, there is only one "Volk" in Europe that doesn't like to pay a fair price, always wants a deal and is stingy as hell. My dear friends from the island, the Brits. May they stay there and never leave.
Germans are a tribe, as you might know. Instead of throwing their money at some retarded investment bankers that take it to the peppermint hippo they bring it to the Sparkasse. Where their neighbor works (the guy with the ugly jacket from C&A, you know). And he will not gamble the money away at the stock market, instead he will give it to someone with a business idea or some small business. Of course, this doesn't create much return, but at least jobs and your money is relatively save. That is how it works. Okay, it is not always that simple, but this concept has created some impressive results over the past decades.
steini; April 28, 2006 10:57 PM