Skip to comments.The Central Bankersí Malodorous War On Savers
Posted on 08/28/2015 8:23:19 AM PDT by PGR88
To wit, artificial suppression of free market interest rates by the central bank is designed to cause households to borrow more money than they otherwise would in order to spend more than they earn, pure and simple. Its nothing more than a modernized version of the original, crude Keynesian pump-priming theoryexcept it dispenses with the inconvenience of getting politicians to approve spending increases and tax cuts in favor of the writ of a small posse of unelected monetary mandarins who run the FOMC and peg money market interest rates at will.
But the whole enterprise is a crock. The consumer spending pump cant be primed anymore because households reached a condition of peak debt at the time of the financial crisis.
They want to pay less interest for the national debt. Since it went below 3% people who retired have had to kill their principle and go on welfare which makes more national debt. It’s a lose lose situation.
This is only part of the problem.
The next Big Bang will be in Retirement funds that are not able to achieve anywhere close to the returns they need to meet their obligations due to this interest rate suppression
What this means is some time in the very near future the shortfall will have to be made up. In the case of defined benefit plans, today found mostly in the government sector, taxes will have to be raised to cover them.
This is very deflationary for the economy.
Retirement pensions (in government) were more like something in a Rico case. Most should never been allowed since they were way more than what the taxpayer who pays this can get themselves in real life.
Secondly, no one should rely on interest for a pension. They should have only quoted contributions and let any interest be an unexpected bonus.
These days the only way to make money is in a pay check.
Hypocrisy of the Left on full display. The bankers have paid themselves over and over again with astronomic salaries and free money to drive stock prices into orbit. The Retired have their savings devalued and robbed. AARP in its role of ‘defender of the old’ says nothing - rather like its opposition to Ocare.
“Secondly, no one should rely on interest for a pension. They should have only quoted contributions and let any interest be an unexpected bonus.”
Ridiculous. Without government manipulation, interest is naturally expected, and an essential part of our whole financial system.
I agree. In a "normal" interest-rate regime i.e.) not manipulated by Central Banks, a reasonably safe return would earn much more - and also, one's savings would not be destroyed by inflation. One could survive on interest earnings.
That certainly used to be the way things were.
You forgot to add illegal (aka unconstitutional).
Spot on otherwise
Of course, if we still had the 4th, 5th, 9th, 10th and 13th (how the 16th can exist and over-ride these, and others....), most/many/all would have enough of their OWN $$, if they wished, to ensure their OWN retirement....or piss it away if they so wished.
A Free people should not need worry about the ‘retirement’ of anyone outside of their own choosing.
Funny, I barely recall the reflection of ‘100 yrs of the Income Tax’, before it was quickly forgotten again....
The Fed Reserve is a creation of Wilson’s term in office but goes back further/deeper into European financial families especially the Rothschilds. I am willing to bet even money that most US citizens do not know the Fed Reserve is not a US Constitutional entity. The paper money used in the US is under control of the international money traders and there are several of these and all dedicated to reap/rape the US citizenry of Constitutional authority.
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