Posted on 06/25/2021 8:36:27 AM PDT by Browns Ultra Fan
To quote Dean Martin, “Ain’t that a kick in the head.”
Real interest rates (nominal interest rates less the inflation rate) are more negative than anytime since 1975.
The REAL effective Fed Funds rate (on the short end) is the lowest since 1975.
The real 10-year Treasury Note yield is also the lowest since 1975.
1975 is notable for a high inflation rate and President Gerald Ford’s infamous song (penned by The Music Man’s Meredith Wilson) “Whip inflation now!”
Win! Win! Win!
We’ll win together,
Win together, That’s, the true American way, today.
Who needs inflation?
Not this nation.
Who’s going to pass it by?
You are, and so am I
Win together.
Lose? Never!
If you can win, so can I.
It is no longer on the internet, but there used to be a video of Meredith Willson plunking this tune on a piano. A truly embarrassing moment.
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(Excerpt) Read more at confoundedinterest.net ...
We need a Volcker clone back at the Fed... a no-nonsense business guy who isn’t afraid to raise rates to where they need to be squeeze inflation out of the economy. Unfortunately, we don’t have that guy and won’t be getting him anytime soon. Watch your money burn, kids.
I don’t borrow money, I save it. Low interest rates have cost me thousands. Wish they would go back up.
I don’t borrow money, I save it. Low interest rates have cost me thousands. Wish they would go back up.
If negative real interest rates aren’t boosting the economy then maybe it is time to admit that out problems are not financial but rather regulatory and social. (Work? Who needs it when I get my gubbmint check for even more)
It’s rare that the returns on savings are higher than the inflation rate. A “savings account” will lose you 2% of your money every single year.
Interest rates high, people have a fit.
Interest rates low, people have a fit.
Bank interest rates ARE rising. My checking account saw a 100% increase over last month. The interest they paid me increased from $0.02 in mid-May to $0.04 in mid-June for basically the same balance.
:)
I pine for the days of ... 4%??????
“We need a Volcker clone back at the Fed..”
The guy that raised rates it 21% and threw the country into recession? NO THANKS!
Hey, those rates sank the Carter administration, so don’t knock it until you try it.
We are heading to a cliff, and you don’t want to stop the car?
Higher interest rates will destroy the economy, because we can’t service the debt at the lower rates today.
Which means we are screwed anyway.
“I pine for the days of ... 4%??????”
My stock account is paying almost 3% in dividends.
That is on today’s stock prices. Much higher if you consider the cost basis of the stock.
“Hey, those rates sank the Carter administration, so don’t knock it until you try it.”
Nope. You have a wrong slant on history. Carter was already toast when he appointed Volker.
He put us into a recession and only Reagan’s fiscal policies saved us.
Reagan took him to the woodshed in 1983 and fired him in 1987.
“We are heading to a cliff, and you don’t want to stop the car?”
I have no idea why you think you are a mind reader.
Raising interest rates is a way to slow inflation.
We are heading to Weimer style inflation, and to be honest the rates should have been raised a decade or more ago.
We have much debt in the system now, it will go bloop sooner or later, and just like an addict it is better to stop sooner.
Check JPS and HNDL for yields in the high 6’s, and they distribute monthly if that matters to you.
Check their morningstar ratings.
You’re welcome, and there are plenty more out there.
Well, we’ll have to agree to disagree. It comes down to the question of which is worse, recession or inflation? Younger people who are working and borrowing and are in a position to benefit from wage inflation don’t necessarily care about But inflation kills savings, as depositors’ money loses value by the day. So, what about older retirees on fixed income? They’re slaughtered by inflation, so is that fair? Volcker’s high rates were necessary to get inflation under control, and they worked and paved the way for Reagan’s boom of the ‘80s. You can give Reagan all the credit, but Volckers’ policies made sense too. Was Greenspan an improvement? He certainly paved the way for massive asset price inflation of which many of us (including me) have greatly benefited. But a lot of folks were hurt by Greenspan’s bubbles too.
Yes, more specifically low Real Rates.
Wish they would go back up.
Given this regime and its policies, I can't see that happening.
“I don’t borrow money, I save it. Low interest rates have cost me thousands. Wish they would go back up.”
This is the mistake too many people make. The only time saving money makes money is when you grab a fixed-rate CD just before rates decrease.
No matter when interest rate banks are paying, it’s below or at best at the rate of inflation. Banks are no-risk parking places, you have to get on the race track and take risks to beat inflation.
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