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The Central Bankersí Malodorous War On Savers
David Stockman's Contra Corner ^ | August 28, 2015 | David Stockman

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 theory—–except 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 can’t be primed anymore because households reached a condition of “peak debt” at the time of the financial crisis.


TOPICS: Business/Economy; History
KEYWORDS: 2016election; barneyfrank; centralbanks; davidstockman; doddfrank; eib; election2016; elizabethwarren; exportimportbank; fauxahontas; federalreserve; glasssteagall; goldbug; goldbugs; lieawatha; massachusetts; notahistorytopic; ntsa; qe; stockman; tinfoiledagain; wallstreet
The Federal Reserve is the foundation of Progressive/Leftist Government. It indirectly supports every leftist social-engineering scheme from Obamacare to Planned Parenthood by giving Government power over your savings, inflation, interest rates and the ability to issue massive amounts of debt
1 posted on 08/28/2015 8:23:19 AM PDT by PGR88
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To: PGR88

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.


2 posted on 08/28/2015 8:33:57 AM PDT by A CA Guy ( God Bless America, God Bless and keep safe our fighting men and women.)
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To: A CA Guy

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.


3 posted on 08/28/2015 8:51:51 AM PDT by Ocoeeman (Reformed Rocked Scientist)
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To: Ocoeeman

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.


4 posted on 08/28/2015 8:57:26 AM PDT by A CA Guy ( God Bless America, God Bless and keep safe our fighting men and women.)
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To: PGR88

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.


5 posted on 08/28/2015 9:05:47 AM PDT by I am Richard Brandon
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To: PGR88
Read the language on last year's Congressional budget agreement, that Obama signed. It allows banks to steal all savings to pay for Trillions in derivative losses, should they so choose. It's real, it's the Law. Thanks Paul Ryan and John Boehner! I am sure they got their bribes. We are all screwed. Any money in the bank is not ours anymore.
6 posted on 08/28/2015 9:09:13 AM PDT by SkyPilot ("I am the way and the truth and the life. No one comes to the Father except through me." John 14:6)
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To: A CA Guy

“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.


7 posted on 08/28/2015 9:09:29 AM PDT by Boogieman
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To: Boogieman
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.

8 posted on 08/28/2015 9:26:06 AM PDT by PGR88
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To: PGR88

You forgot to add illegal (aka unconstitutional).

Spot on otherwise


9 posted on 08/28/2015 10:01:33 AM PDT by i_robot73 ("A man chooses. A slave obeys." - Andrew Ryan)
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To: PGR88; Boogieman

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....


10 posted on 08/28/2015 10:07:16 AM PDT by i_robot73 ("A man chooses. A slave obeys." - Andrew Ryan)
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To: PGR88

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.


11 posted on 08/28/2015 10:14:57 AM PDT by noinfringers2
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