Posted on 09/14/2012 3:51:58 AM PDT by SoFloFreeper
One of the most powerful moments of Ben Bernanke's press conference yesterday, after the Fed announced Unlimited QE, was when he refuted some myths about Fed action before he started the Q&A.
In particular, he took on the idea that the Fed was screwing savers because rates are so low, and you can't get any return holding money in the bank.
Here's what he said:
On the second concern, my colleagues and I are very much aware that holders of interest- bearing assets, such as certificates of deposit, are receiving very low returns. But low interest rates also support the value of many other assets that Americans own, such as homes and businesses large and small. Indeed, in general, healthy investment returns cannot be sustained in a weak economy, and of course it is difficult to save for retirement or other goals without the income from a job. Thus, while low interest rates do impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates help promote.
So in other words: The main thing is that you can't save if you don't have a job, and that's what the Fed is trying to address. Furthermore, there are lots of kinds of assets that do benefit from low rates.
When the economy returns to health, savers will be able to get paid, just like everyone else. But until then, there's no special right to earn income on having money in a bank.
(Excerpt) Read more at businessinsider.com ...
It is pure debasement of the currency, plain and simple. Historically, it rarely ends well.
My hat is off to our Canadian neighbors. They are reaping the benefits of sane economic and energy policy.
They are trying to bring America to its knees while the sheeple are sleeping.
I had a grandma who kept her money beneath a floorboard under her bed. Maybe I should do the same.
There are no rewards for people who work hard and save their money. They are all saps.
Weimar Germany DELIBERATELY devalued their own currency.
Why? To get out of paying war reparations.
What’s “O’s” excuse? Something JUST as incidious, you can bet!
‘Manufactured crisis’ comes to mind. I just KNOW there is something very irregular, illicit and deliberate which is going to be forced by this Administration.
The only way the government will be able to pay for Social Security will be to inflate it away.
Unfortunately, that is taking away the money we saved to compensate for the loss of SS.
Message to savers: “FU”.
There were decades when S&Ls paid 4% on passbook savings and loaned the money out on houses at 6% ... and it worked just fine.
No more.
Oh, you can still get a return on savings... just don’t save in the form of cash. Saving in the form of tradable metals is perfectly viable.
Exactly. Savings not only are suffering from low interest, their true VALUE is going down, as the dollar is de-valued.
This is all in furtherance of Global Governance, where we will LOSE the Dollar as the Global Currency, and we can then take bushels of them to go and buy bread.
Unless we IMMEDIATELY return to Free Market Government Hands-Off, we are not turning back.
Pure Keynes.
Personal savings are being STOLEN BY THE STATE!
When asked if this was political, his eyes started blinking fast and he looked down and to the left. Classic tells.
There was a time in this country that was a capital offense.
Paying off a 30-year fixed rate mortgage at an interest rate around 4.5% is great for the borrower, but the lender is going to take a huge bath on this if: (1) interest rates rise; and/or (2) the effective currency inflation rate is higher than 4.5%.
They CAN’T raise rates!
It would totally implode the economy!
http://www.freerepublic.com/focus/f-chat/2930615/posts
To the extent that our economy “works”, it does so because people spend. Each and every year, we hang our hat on the Christmas season. The entire health of the economy judged by people spending money they don’t have on stuff they don’t need. When that’s your barometer, you’re screwed. Saving is for the manufacturing powerhouses, not the U.S.
BOHICA.
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