Posted on 03/05/2012 5:50:54 AM PST by SeekAndFind
STOP your bellyaching.
That was the message delivered last Thursday to Americans who today make almost nothing on the savings in their bank accounts.
It came from Sarah Bloom Raskin, an insider at the Federal Reserve. Ms. Raskin, one of the governors on the Fed board, made the usual disclaimer that her comments reflected her own thinking. But Fed watchers said her remarks probably mirrored views inside the central bank.
The issue — as anyone looking for income-producing investments knows — is that the Fed drove down interest rates to almost zero to shore up big banks and an economy that those banks helped drive off a cliff. Now savers, who did nothing to create the financial crisis, are being punished.
This is one of the more troubling paradoxes of the Fed’s rescue of the financial system. And, according to Ms. Raskin, it is likely to continue for some time.
So suck it up, America: If it’s good for the financial system, it’s good for you.
Yes, Ms. Raskin, who delivered her message during a speech in Westport, Conn., nodded at how low rates put pressure on savers. But she quickly extolled the advantages that rock-bottom rates offer to ordinary Americans.
(Excerpt) Read more at nytimes.com ...
I guess savers are not ordinary Americans, they must be evil and punished.
I guess savers are not “ordinary Americans”, they must be evil and punished.
I get 10% of a penny on my CD’s.
Government agencies are telling their employees to save their money in 401ks so they can retire. Boy: Is that a joke.
Every day I watch advertisements for Reverse mortgages on homes. The homes of people who retired on their savings interest income and have had the principle eaten so they could survive.
These are ordinary people too.People forced to work at McDonalds and as Walmart greeters to eat.
Meanwhile the cost of gas and heating fuel is soparing and state taxes are rising.
Then I read that under Obamacare the Government will have the power to go to my bank account and draw out money to pay for their crooked insurance they want to force me to buy.
They can take my money that I might need to buy food and pay their stinking assed crooked Obamacare with it.
I no longer have a choice between health insurance and eating. I will have health care , but I might not eat, and what happens when that money they steal from me is gone.
It makes me think that maybe I would be smart to start slowly taking out my funds now and burying them in the back yard. Better that than wait for the Fourth Reich to break me.
If you like real-world lessons, take out a ten thousand dollar loan for a month and put the money into a savings account at the same bank. Look at the percentage difference. Not the percentage rates of the loan and the savings account, but the amount you receive in interest from the savings account as a percentage of what you pay in interest for the loan. The banks always win.
I don’t blame anyone for this. I just don’t keep any money in the bank. For me it’s bonds and PM’s.
Heck, my sister and her husband are cutting back on expenditures, and they’re worth hundreds of millions. Most of their investments are in things like municipal bonds and other tax-free and relatively risk free stuff. They’re selling one of their boats (A 115 footer with six suites), but keeping the Cesna Citation. They laid off the crew of the boat and the captain was making six figures.
When you have the money they do, you should be able to live off the income your money generates. When rates, etc. drop to the point where you are spending more than you are earning, you cut back. Which is what they are doing.
My wife and I, on our small scale, have done exactly the same thing. Restaurant visits are extremely rare now and paying off every penny of debt (including mortgage) and prepper activities is what it is all about. And we are still having a blast!
The rich are not stupid. That’s how they got rich.
Ahhhhh, the unintended consequences of gubermint meddling in the economy. No return on savings = no savings (or find another place to invest)...this will hurt the banks long-term because it dries up the reserves they need to make loans. I already cashed in my CDs...it wasn’t even paying enough to offset the risk of bank failure.
Of course they always win. They’re in the business of buying money wholesale and reselling it at retail. Leaving loss leaders aside, do you no expect your local grocery store to charge more for cantaloupes than they paid for them?
Best rate out there I have found is INGdirect.
It pays a measly .08, but that is better than the other banks.
Never thought I would recommend a bank paying .08 on savings accounts.
Salient Capital in Houston has a very concise 3Q Macroeconomic Report that also discusses the wealth elimination taking place under ZIRP.
Long wave contraction, Baby. Long wave contraction!
RE: Best rate out there I have found is INGdirect.
What about Capital One, which boasts interest at 5 times national average? (What’s in your wallet?)
The NYTimes and the WSJ editorial pages are 180 degrees apart on "global warming", but if you took a half-dozen random articles from each on the *business reporting* side of any "energy" issue, without the bylines you would be hard pressed to guess which came from which publication.
Lots of media-aware libs *hate* the WSJ editorial pages, but readily admit that the *business* reporting is probably the best of any US daily.
Gretchen Morgenson, Floyd Norris and Joe Nocera - all business reporters who are also occasional NYTimes editorial contributors - are three of the best business *reporters* at any US daily, and have a long history of writing articles which do not adhere to the "party line."
If you want your business coverage to be taken seriously, that's the sort of staff you have to have.
IMO even from an "editorial" standpoint, if you just read just one or the other you are going to be missing a lot of information that's valuable for personal and business planning - if only because the economic environment is created in part by the "message" from both camps.
For that matter, if you read only the US media you are missing a lot of perspective, even a "center-right" publication such as the Financial Times covers a lot of material that receives poor coverage here, or covers it from a wider range of perspectives; many FT commentators are a *lot* more cynical about both government and business than their US counterparts, which IMO is a good thing.
Well, that's pretty much the current plan: you allow the banks to arbitrage off the difference between .04% cost and 24.25% interest on consumer credit cards.
The people who get hit first are the unemployed who are living off CCs, longer term it's anyone who derives substantial portions of their income from interest paid on readily accessible low-risk "investments".
The result is a huge and accelerating shift in wealth-holding patterns - the difference is that increasingly larger numbers of people realize that the problem is *both* "business" and "government", that as far as the FIRE sector is concerned, we are effectively living under conditions of "State-Capitalism".
This is a TAX on savers—plain and simple. Why? So the Government can borrow at close to zero interest rate. It basically keeps the cost of Federal interest payments down so the goodies (entitlements) can keep on flowing.
In addition, real inflation is probably closer to 10%—another hidden tax.
Capitol one is a credit card that pays you back a % of your annual purchases. Not a savings account, as far as I am aware....
I should also add that this isn’t going to end anytime soon. In fact, wouldn’t be surprised if (in ten years) you have to PAY for the priviledge of keeping your $$ in a bank. Why? Basically, they’re offering a wealth preservation service. Because, by that time, everything else will be a losing proposition.
Oops, here are their rates:
Capitol One Bank
Interest Plus Online Savings 0.65%† Calculator
Interest Online Checking 0.60%
Rewards Money Market 0.40%
†Balance at least $1,000
Still less than what ING pays on SAVINGS accounts..80%
It's been a helluva lot longer than that; I quit working 10 years ago and could have eked by on the 8% my money market was paying....that rate evaporated within a year.
So I did what millions of others have done - put 'pressure on the system' and went on the Social Security tit at the very first opportunity, instead of waiting until age 66 or 67.
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