Robert Folsom via Financial Armageddon…..

At the end of 2006, the financial assets of financial institutions surpassed 20% of annual GDP (those assets had never even eclipsed 5% of GDP until the early 1990s).

Since a picture is worth a thousand words, follow the link and look at the graph. It will do a much better job of communicating the dramatic nature of the change then mere words will.

If I was good with graphs, I would take the graph that Robert Folsom made and I would slap a graph of the national savings rate over it. Unless my memory is playing tricks on me, the growth of the financial assets of financial institutions matches the dramatic fall of America’s saving rate over the same period.