Capital Saturation

  

It seems like one of those good problems. You're just saturated in capital. Stuffed with it. Soaked in it. Your swimming pool is filled up with hundred dollar bills and your shower head spits out quarters. (Okay, that last one migh hurt a little bit.)

It's actually a dangerous situation. "Capital saturation" refers to an economic environment where the savings rate is low and people (and companies) spend a lot on consumption.

That probably still sounds kind of fun. But it can represent the party before the hangover.

All the spending can contribute to economic bubbles, and the low amount of savings provides no safety net if things go wrong. Think: Roaring Twenties, followed by the Depression. Or the housing bubble followed by the financial crisis of 2007-2008.

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