QEInfinity Sounded the Death Knell For Savings Interest Rates (loan, real estate, debt)
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Many here were saying that it was just a matter of time and economics before interest rates on savings and CD's returned to a healthy 4-6% like before the crash.
I'm here to tell you savers that interest rates will NEVER return to anything above 1%. QEI is putting so much money into banksters' coffers that they see no need to lose money paying interest to savers who have proven they will keep their money in the banks, even at .05% interest.
I've taken appropriate action relative to my own finances. I have enough in savings and real estate to comfortably draw down the principle for 15-20 years--my life expectancy at the outside. I will simply spend it all down and die broke like Stephen Pollan advises in his mega bestseller of the same name. That is my middle finger to Dimon, Stumpf, Moynihan, Blankfein and all the other crooks who run our crooked banking system.
cash is an asset class like any other and it carrys risk as well despite the fact most ill-informed folks didnt think so.
the fed just about sent out sky writing planes saying rates will be low to zero so why didnt folks just buy bonds instead instead of cd's for their idle cash...
the capital gains from these nice low rates was just wonderful and it may still continue but now its late in the game.
you cant hide in any asset at the wrong time and not think its not going to hurt you.
its not even just america. the world banks are dropping rates in countries all over the world .
the fed just about sent out sky writing planes saying rates will be low to zero so why didnt folks just buy bonds instead instead of cd's for their idle cash...
Because cash in the bank tends to balance trade. It stops outsourcing. buying bonds drive the real estate bubble The Fed is trying to re-blow.
Banks couldnt care less about your deposit, they get all they need from daddy fed.
They dont even have takers for that money with the world,business and the consumer shedding debt.
Banks make money borrowing short term from the fed or depositors and loaning long term for mortgages or buying longer term treasuries and making money on the spread.
Your logic above has no merit at all.
Last edited by mathjak107; 10-06-2012 at 04:13 PM..
The strange thing is that QE is menaty to force people into equities. But so far is has worked really. It seems that people like int eh 70's recession wioll take losss with low inflation over trusting the markets in equities.The 70's recesssion ended in a genration of people leavig the stocks and investing more in real assets.What we have seen this time is elimination of debt and savings even with twenty somethings. Looking at componies they are buying back stocks and holding huge amounts of money rather than investing in M&A.No change in risk off at all.
cash in the bank has nothing to do with balancing trade... what i think you mean is BOP , balance of payments but again that still has no merit .
as far as out sourcing keeping our money in bank has nothing to do with whether we out source or not.
Saving dollars would I suppose strengthen the dollar which would simply mean that someone else would spend more or we would tend to export less. So I agree with you. Saving green paper just does not mean much. Investing in in something people overseas want to buy would help the balance of trade. This ought not be confused with simple abstinence. Buying bonds from a business might help the balance of trade. However with high real estate prices compared to developing countries its quite difficult. We also lose many dollars in from the reserve currency effect which means the dollars never make it back to cause demand in the US and support international trade.
So in short, saving it in a bank will do nothing for the balance of trade.
nah , not at all , none of those reasons the poster gave are valid. in fact you cant even go by weak dollar or strong dollar.
when the dollar was weakening the last time around foreign central banks were dumping dollars weakening the dollar but you know what they were buying?
good ole american TIPS.
YEP TIPS.. they were hedging by selling dollars and buying tips . tips though dont record as dollars so while the dollar was showing weakness the reality was the foreigners were loading up on our tips.
Because cash in the bank tends to balance trade. It stops outsourcing. buying bonds drive the real estate bubble The Fed is trying to re-blow.
YES, the Fed's are inflating a new bubble as we speak. More and more speculative investors...in some areas, are once again pushing housing into the bubble range.
This country cannot and will not fix structural problems.....quick and dirty is the best we can do.
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