Thursday, January 14, 2010
NYT Exposes Zimbabwe Ben-Finally
"Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit. The elderly and other on fixed incomes have been especially hard hit. Many have seen returns on savings, CD's and government bonds drop to niggling amounts recently, often costing them money once inflation, fees and taxes are considered. ... Interest on one- and two-year Treasury notes was just 0.40 percent and 0.89 percent as of Monday. ... 'The unemployment situtation and the general downturn in the economy had an impact, but what's going to happen now as CD's mature is that retirees and the elderly are going to take anywhere from a half to three-quarters of a percent cut in their incomes,' said Joe Parks, a retired accountant in Houston on the advisory board of Better Investing, an organization that works to help people become savvier investors. 'It's a real problem.' Experts say risk-adverse investors are effectively financing a second bailout of financial institutions, many of which have also raised fees and interest rates on credit cards. ... 'What the average citizen doesn't explicitly understand is that a significant part of the government's plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,' said William H. Gross , co-chief investment officer of the Pacific Investment Mnagagement Company or Pimco. 'It's capitalism, I guess, but it's not to be applauded'," my emphasis, Stephanie Strom (SS) at the NYT, 26 December 2009, link: http://www.nytimes.com/2009/12/26/your-money/26rates.html.
Yes SS. I've said this for years. What's safe about leaving your money in a bank? Here I go again: "Got gold, get more. Got bonds? Sell immediately". Remember: Interest is what the government promises to pay to to steal your principal. Well Gross, you manage hundreds of billions. Will you close Pimco as a sham and tell your "investors", i.e., fools buy gold? Don't you have enough money Gross? Do you still need to work?