Consumers pay for things with credit or with money they have in the bank; out of their savings. If they pay using credit they pay later out of savings. Its a matter of time called a loan, which they may or not pay extra for depending on the terms. Not paying extra is not where the money to be made on the credit loan but that is something else to ponder.
Credit and savings are both revolving fund pools of money upon which to draw and replenish. Consumer use of credit as well as the pool of credit money in the total credit revolving account is increasing. The credit card revolving fund pool is now $2.75 Trillion. During the month of October it increased $14.2 Billion.
What is happening on the consumer savings side. The savings revolving fund that ultimately pays or pays something to the credit revolving fund?
What are the numbers there for the savings revolving fund pool and its October increase or decrease?
There is a relationship between the two revolving funds. I would like to know the comparable numbers related to each revolving fund.
Still searching....
One way to get to the numbers I am looking for is to ask: How much is total consumer spending regardless of what kind of money, credit or debit they are using to buy the stuff.
While looking for that number I found data on the average American daily spending here. Not what I want to know but interesting enough for a side trip.
Start of the report at the prior link:
.................................
Americans' self-reported daily spending averaged $73 in November, essentially on par with September and October. It is also similar to the $71 Americans spent last November and slightly higher compared with November 2010 and 2009 -- but still much lower than in November 2008.
The results are based on Gallup Daily tracking from Nov. 1-30. Each night, Gallup asks Americans to report how much they spent the prior day apart from normal household bills or the purchase of a car or home.
U.S. Upper-Income Spending Sees Worst November on Record
Upper-income Americans' (defined as those making at least $90,000 per year) self-reported daily spending was lower this November -- an average of $113 -- than in any November dating back to 2008. Upper-income spending has been trending downward since September, although the decline has not been large enough to drag down the overall spending figures.
Lower-income Americans' spending in November -- an average of $61 -- is on par with the $60 they spent last November. Lower-income spending is generally quite stable from month to month and has been holding steady since March.
End of Report......................................................................
What???? Upper Income is spending only about $50 more per day than lower income? "apart from normal household bills or the purchase of a car or home."
Guess so....but 365 X 62 = $22,630 excluding house, car and normal household bills.
All I can find are savings rates, variation in savings rates from last month to this month. I want some hard numbers. This is frustration!
Total consumption is like $16 trillion but that is not consumer consumption which is 70% of the economy or $11.2 Trillion? The purchase of all that stuff is supported by a $2.75T credit revolving fund and an $???T Savings revolving fund?
Total production = Total Consumption....Consumer consumption is 70% of that. It that correct?
From Investopedia:
Definition of 'Consumer Spending'
The amount of money
spent by households in an economy. The spending includes durables, such
as washing machines, and nondurables, such as food. It is also known as
consumption, and is measured monthly. John Maynard Keynes considered
consumer spending to be the most important determinant of short-term
demand in an economy.
Consumer spending is not a simple thing as can be seen here
To end the confusion I will simply make a guess that it is around $11T per year. About a Trillion a month.
So: We are buying about a Trillion a month with a $2.75T revolving credit card debt fund and a $????T revolving saving fund.
One step closer to finding what that $???T saving revolving fund amount is.
No, not at all...
Our total M2 money supply, our spending money in the bank, our Debit Savings Revolving Account is $10T. But that is the total held by business as well as consumers. What the heck is the consumers portion. All I can say is that it is less than $10T! If I knew how much business is holding I could subtract that from $10T
Why is the simple number total of all the money held by consumers as a savings revolving funds at banks to pay for their personal consumption of stuff so hard to find??
It is getting to the point where I am forgetting why I wanted to find it in the first place. I thought it would be simple.
I still don't know what money is but I know what it is not: Simple!
New Economic Perspectives has an "Ask Us" category at the website. So I asked this question:
This is a proposed follow up to my question but I decided not to submit it:
To both refine my question and perhaps contribute to its answer:
$5.65 Trillion was the total Savings Deposits at Commercial Banks reported on 11-26-2012 at this site: http://research.stlouisfed.org/fred2/series/WSAVCBS
Some portion of this total is consumer level savings. The specific level of consumer that I am interested in is the same category of consumer who I will call a "debt based" consumer that is carrying (equates to) $2.75T in consumer credit debt.
$1.28T is the "Total Checkable Deposits (TDC)" reported on 11-26-2012 at this site: http://research.stlouisfed.org/fred2/series/TCD?rid=21&soid=1
I make a broad guess that some portion of this total is the total amount of money in all consumer bank accounts and a sub set of all consumer bank account holders are "debt based" consumers. The non-debt based consumers being the ones that pay directly out of liquid assets money. Note that there is a third category that use a credit card as a "non-charge" bearing form of a free line of revolving credit for a specific period of time. That amount might be hard to identify as a limbo category but one that many pass through going either way from constant debt based to non-debt savings based or simply always remaining in the limbo area to some advantage.
The refined question is: What is the total of consumer savings "revolving fund" out of which these "debt based" consumers pay all their bills including the bills from their consumer credit revolving account debt totaling $2.75T?
It would appear that the answer is the "debt based" consumer category of the total $400 Billion called Personal Savings as reported here: http://research.stlouisfed.org/fred2/series/PMSAVE
However: The chart at that site must not be what consumers, at least my simple idea of the "you and me" kind of consumers have in their personal savings accounts to pay bills. That total should be a rather stable number and this chart is all over the place! It peaked at almost a trillion prior to 2010. Did everyone stop paying their bills for many months?
Real people, common "debt based" consumers have a total of $2.75T credit card debt (if that is true).
How much in total demand deposit savings out of which to pay credit card debt charges do these "debt based" common consumers have? I guess my question can exclude old school cash in the pocket considered as savings because it is relatively a small and therefore not significant amount of "savings"? How close to a personal debt cliff in the gross analysis is everyone living in the debt based $2.75T world where falling off the cliff means personal austerity? Converting their accumulated non-liquid personal savings or wealth, in whatever form (like the family china or stocks) to liquid personal savings that pays bills. Bills that in the gross analysis (are or were) paid in the old fashion way of income from work going into the personal savings account from which it was spent with maybe a cushion for rainy day or vacation to a place where there is sunshine?
Can that number even be found? Which might be the simplest of all answers: Yes or no. If so, any ball park WAG guesses will do.
Update; December 15, 2012:
This provides stats on Personal Income and Its Disposition. Go to the link and be dazzled by the numbers. Find in all that numerical razzle dazzle the one I am looking for, at least as closely related to the one I am looking for. That "close but no cigar yet" number is Personal Saving at $431 Billion. Although it is called "Saving" at the bea.gov link I interpret it to mean Savings. Go back to this Wikipedia link I mentioned previously to see the difference. The Personal Saving number is one of those flat our wrong word descriptions of Savings as per the Wikipedia link. Saving and Savings are two different things.
$431 Billion starts to answer my question. It is the savings of how many people? At the bottom of the chart is an addendum. It uses a population of 314,589,000 people and expresses per capita dollars. Extremely confusing. Especially when it is called "chained to 2005 dollars, whatever that does for anything!!! I am getting dizzy. Time to grab on to something solid!
What is solid? The total number of living, breathing people in the USA: Gimme Realtime! This is a Real Time Number Site. Total USA Population right now, Saturday, 12 December, 7:22 pacific time is: 314,779,987 people. I will accept that as a fact and run with it! The site has some other fascinating real time numbers that you can see change in real time!
I like real time. There is nothing that is as real as real time!
The site has real time consumer debt at: $2.548 Trillion. Mortgage debt at: $13.262 Trillion.
The site shows about as many (663,000) homeless people as there are people with a net worth over $5 million doallars.
I wish the site had the real time savings total in M2 dollars!
Another real time site just for fun that measures things from the instant that I go to the site.
What was the purpose of this blog entry before I got side tracked? Good thing I put a subject title on it!
Getting back to statistics that are not fun: This site talks about FRB findings on stats related a survey taken every 3 years focused on Consumer Finances. The site links to that study which is a PDF. I find it difficult to make a link directly to a PDF unless google gives a quick view of it, which is the case with this one. Go to the link site then the link to the PDF in order to view it. I can't make direct link here. The PDF is an analysis that shows the redistribution of wealth. Many links commenting on it can be found by google search. Redistribution of Wealth is a hot topic.
It seems that the collective total amount of M2 money in all of our personal bank savings accounts is like a big revolving fund to pay our consumer purchases and bills. The current ones as well as future big ones like dream trips, etc. We can also pay with revolving credit but that revolving credit spending the same as cash is ultimately replenished with cash payments from our collective savings, sooner or later, plus fees.
Reports for November 2012 state that consumer credit card debt is $2.75 Trillion and increased $14.2 Billion in November over the previous month.
It appears that the m2 combined total of business and personal savings accounts is around $10T?
What is the total dollar size of all personal savings bank accounts out of which we pay for personal consumption? Or what is the remainder of $10T savings (if that is the total personal/business savings amount) minus business savings accounts in m2 dollars.
Is there a place where such a number is commonly published? I find info about rates of savings but I can’t find find total dollars in personal consumer savings. I would think that is an important macro number. It is an important micro number to me.
TIA. I appreciate the knowledge I gain from this site.
Business uses credit card debt as well a consumers but I would expect that their use and credit debt is not included in what is called consumer credit card debt.