Abstract
Bernanke blamed the global savings glut for the relatively low yields on longer-term US Treasuries in 2004, singling out the savings of emerging economies. Bernanke omitted, however, that US corporate demand for US Treasuries was at least as large. It would be more apt to speak of a corporate savings glut, especially because emerging market’s savings consist also for a large part of corporate savings. Also, it is too simple to blame foreign capital inflows for the housing bubble as causality runs from rising house prices to the deterioration of the current account, not the other way around. More importantly, there is a long-term trend toward lower interest rates that is, foremost, the result of the shift in income from labor to capital.
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