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We could offer better returns for simple minded savers, through central gov't policy. Either through tax favoring or money support of higher rates of return. China has done just that in the past. But right now our economy lacks general demands. So encouraging saving per se is somewhat counter-productive right now.
I see no other reason for high rates. Low rates are good for business, and they are good for the markets, 401-k's and housing. Huge middle class benefits. Of course even better for the rich.
I have always saved a large portion of my income, no matter what the interest rates were. That's because I can invest and make a return when interest rates are low. Just as good as putting it in the bank and receiving an interest payment.
Quote:
Originally Posted by pknopp
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The low rates are low for one reason and one reason only. It's what Wall Street wants.
I agree. We are propping up some pretty hefty valuations.
Would anyone consider what is happening with our monetary system, healthy in the long term?
Is there a bubble gaining size, or is there a big enough hole to let off some pressure?
Can't do that... especially if it's enforced on the government debt.
Someone correct me if I'm wrong - but I thought the debt was one of the main reasons interests rates are zeroed out.
I guess if we are the reserve currency, we still just print the money - but we would have to print much more of it - which would devalue the currency.
Yes, I need to amend my earlier statement.....we have artificially low rates for two reasons......Wall Street and politicians want it but in reality they are one in the same so I was still technically correct at first.
We could offer better returns for simple minded savers, through central gov't policy. Either through tax favoring or money support of higher rates of return. China has done just that in the past. But right now our economy lacks general demands. So encouraging saving per se is somewhat counter-productive right now.
I see no other reason for high rates. Low rates are good for business, and they are good for the markets, 401-k's and housing. Huge middle class benefits. Of course even better for the rich.
8% interest rates would lead to an explosion in the national debt and a worst recession than the last one. I have aligned my interests with Wall Street's. That is what everyone should do.
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