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Yet another thread about interest rates that ignores the distinction between real and nominal rates.
What is the difference between a rate of 1.5% with a 0% rate of inflation or 5% with a 3.5% rate of inflation? Nothing.
Are you seriously suggesting that we have a 0% rate of inflation right now?? I'll still take the 5% even with the 3.5%. At least I can find ways around inflation rates.
Are you seriously suggesting that we have a 0% rate of inflation right now?? I'll still take the 5% even with the 3.5%. At least I can find ways around inflation rates.
Yes inflation is close to 0% right now.
How are you going to find ways around inflation rates? Inflation devalues the currency, there is no avoiding it if you have your money in a CD.
Well, the banks HAVE to do that in order to survive in the face of ever increasing losses from people who charged up way more than they could ever hope to pay back in credit card debt or got over their heads by refinancing mortgages and taking cash out for trips to Disney world or flat screen tvs, never saved a cent of their own money, and have now decided they can just walk away from it all. Just like any other business, we all pay for the deadbeats and thieves with higher prices, and in this case, close to zero interest. What else do you expect?
the banks can take their "asset" back, instead of hitting the taxpayers up for a bailout. oddly enough, the banks seem to be sitting on those "assets", waiting for them to appreciate instead of reselling them at current value. in the meantime, the taxpayers are being held hostage to artificially inflated (and unsustainable) housing prices.
Give it a rest guys and just accept the fact that "this" is the way it will be for the forseeable future. Banks aren't going to pay a dime more than what they have to. To do so would take money out of the bonus and profit pool. And they aren't about to have that. Remember. You are here to serve and enrich the banks. Not the other way around. You need them. They don't need you. The politicians that you choose to keep re-electing have basically said that outright with their actions.
Be thankful that they're paying you anything at all. Sure. Some of you will sit there and saber rattle about "closing your accounts and moving it elsewhere". But let's be realistic here. Very few (if any) of you are going to actually follow up and actually carry that "threat" out: You don't want the hassle. You don't want to lose your history and you sure aren't about to go back to prehistoric banking of cash and maybe a few checks. Your online bill pay, "anywhere" debit cards, and PayPal, etcetera are just too convenient to give up. That's the trade off. Live with it.
Yet another thread about interest rates that ignores the distinction between real and nominal rates.
What is the difference between a rate of 1.5% with a 0% rate of inflation or 5% with a 3.5% rate of inflation? Nothing.
Actually there can be quite a lot of difference. The gross inflation rate encompasses a wide range of items, many of which may or may not be applicable to a specific individual. For example, housing (obviously deflating at the moment, but the example is germane) comprises something around 30%ish of the CPI. An individual with paid for housing is immune to inflation's impact on that item (excepting of course property taxes).
I'd much prefer general return rates in the 5-6% range than the miserable rates we currently have and could happily deal with moderate inflation.
Originally Posted by user_id
Yes inflation is close to 0% right now.
How are you going to find ways around inflation rates? Inflation devalues the currency, there is no avoiding it if you have your money in a CD.
Why don't go shop for groceries and then come back and then tell me that with a straight face?
That's exactly what I was thinking. My already-overstretched CC shows like a 10% increase in just normal spending. Chalk that up to groceries and gas and drug store shopping and non-edible items and it sure looks likes there's inflation to me. I have cut back on some of that stuff and still my CC bill is higher. That's what i mean by controlling inflation somewhat.
Give it a rest guys and just accept the fact that "this" is the way it will be for the forseeable future. Banks aren't going to pay a dime more than what they have to. To do so would take money out of the bonus and profit pool. And they aren't about to have that. Remember. You are here to serve and enrich the banks. Not the other way around. You need them. They don't need you. The politicians that you choose to keep re-electing have basically said that outright with their actions.
Be thankful that they're paying you anything at all. Sure. Some of you will sit there and saber rattle about "closing your accounts and moving it elsewhere". But let's be realistic here. Very few (if any) of you are going to actually follow up and actually carry that "threat" out: You don't want the hassle. You don't want to lose your history and you sure aren't about to go back to prehistoric banking of cash and maybe a few checks. Your online bill pay, "anywhere" debit cards, and PayPal, etcetera are just too convenient to give up. That's the trade off. Live with it.
I agree with this, but the minions of the world are at a breaking point. Generation ‘X’ has been financially screwed/manipulated over a long period of time. However, Generation ‘Y’ (20 something) has been financially screwed/manipulated over a very short period of time; I don’t think they’re going to put up with the greedy top 1% to 5%’s behavior much longer.
IMO the old way of banking (more dependence on customer deposits) is going to have to be re-incorporated back into the financial system. 401k’s may be good for people in the 30%+ tax bracket, but people below that need a no-nonsense way of saving/building wealth.
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