"If you're a retiree who relies on interest income, you know that the tap is running dry. In fact, many investors in certificates of deposits, savings accounts and money market accounts are losing money once taxes and inflation are subtracted from today's extremely low yields. Less well known is that measly savings yields are central to the government effort to buy time for the banks to earn their way back to health. It is important to rebuild the banks. But more attention must be paid to the collateral damage from that effort. Here's what's happening: By lowering the short-term interest rate it controls to virtually zero and creating lending programs, the [Fed] has enabled banks to borrow cheaply. ... The result is presumably healthier banks and certainly poorer savers", NYT Editorial, 18 January 2010, link:
Fed policy is: "Crucify savers on a cross of paper". Where is a William Jennings Bryan today to challenge the banksters and their apologists in the US government?
3 comments:
The true art of managing the credit and money supply is to know who has what and what kind of behavior they have... dumb money or hot money.
Retirees and everyday people are mostly dumb money. The Fed and banksters rely on them to sit still while rates are lowered to zero.
Imagine zero interest rates and higher inflation. That combo repairs all of Mr. Bernanke and Obama's friends balance sheets.
Hopey changey. No.
Just an opinion on how the unwashed masses can get even:
Organize a collective movement among all people who have a loan of any sort with any financial institution that was given preferential treatment by the Fed, the government, Treasury, etc. Get as many commitments from across the country from as many willing participants as can be found. Auto loan with GMAC, mortgage with Citibank or Bank of America, student loan with SLMA, etc. – you get the picture.
Set an easy to remember date such as July 4 or Guy Fawkes Day or whatever. Declare that month to be a warning shot over the bow (in a matter of speaking). And the action? Simple, don’t pay that month’s note on said debt. I would bet dollars to doughnuts that a large scale collective default of that month’s payment would get the attention of all the big swingin’ dix that are in charge. No action? Well, how’s about we go for two months default in the upcoming quarter? We don't have debtor prisons anymore and what are they going to do? File a suit against everyone? Jeff
Debt payment holiday?
Yup... that would shake the foundations...
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