Financial tools

Taking control of personal finances has become something of an Achilles heel for Americans. During the middle of the last decade, the personal savings rate for the average American household was an astonishing zero percent. This boggling figure was down from an abysmal five to six percent savings rate at the turn of the millennium. The problem is cultural, American culture does not equip its citizens with the right financial tools to become savers.

The evidence for this can be found across the pond in China, where the household savings rate is an impressive twenty five percent. This figure has been more or less static over the past 20 years, even as the size of china’s economy has multiplied many times over. In 2010 a report declared that China had surpassed the United States as the largest consumer of energy in the world. They are a wealthier economy as well, although not per capita. Their savings rate and financial tools indicate that eventually they will surpass the US on a per capita basis as well however.

The frightening part of global economics is that roughly ninety percent of the global economic output is accounted for by the US, the EU, China, and India. They have the overwhelming majority of the financial tools and capital reserves to create infrastructure, production capacity, and additional wealth. This leaves other players, like the continent of Africa out in the cold trying to catch up to an ever expanding technology gap.