ZERO INTEREST RATES PUNISH SAVERS
Zero interest rates? We are not there yet but are they far behind?
There are finally a few more articles being written on the subject of how responsible people who save money are getting the short end of the deal with these low interest rates. This MSN money article says what I have been saying all along: retirees and savers have had a major part of their income taken away.
No one in this society seems to care a bit about people who have been responsible all their lives and are not in debt. No one cares that seniors live off of interest income (and their small social security checks) and that has been taken away from them. No one seems to care that it is impossible to teach our youth to save when it doesn’t pay anything to save!
Another article out today details how, for the second year in a row, social security increases will not be given for inflation. As prices continue to go up, our pay to senior citizens remains the same. Some thanks they get!
It’s a very sad state of affairs when the highest money market rates you can get are under 1%. If we follow Japan’s lead, we can look forward to them soon moving them to zero percent. This administration is grasping for ideas and all they know how to do is borrow more money and then flush it down the toilet. What do we have to show for all the money from the stimulus bill? Where did it go and why is unemployment not getting any better at all?
The part that gets me is the demonization of anyone that has any money at all. We now have definitions of what “rich” means: anyone who makes more than $200,000 a year. But making $200,000 a year in New York city is like making $70,000 in Omaha Nebraska or other cities. No one mentions the cost of living and no one cares about it.
Being in debt is now the norm. Not having a job is also becoming the norm. Relying on the government is now commonplace. We have become a country of whiners, complainers, and moochers. Anyone who is succeeding must be doing something unethical or illegal. Anyone who is getting ahead without the government’s help must surely be doing something wrong.
People who have savings have worked hard for that money and done the responsible thing: they have put it away for a rainy day. Unlike our government that knows only how to spend, people with savings understand they need to prepare for the future. Our politicians care about only today and their jobs while the sell us down the river.
Where can you go to get the best interest rates right now? You have to go online and search for rates all over the country to find the highest rates. But it’s hardly worth your time right now because you aren’t going to get much more than 1% and zero percent is probably right around the corner.
JAPAN IS CUTTING INTEREST RATES TO ZERO: IS THE USA NEXT?
Today on October 5th, 2010, Japan made a surprise move and cuts it’s interest rate to almost zero. The interest rate will fluctuate between 0.00% and 0.1% until a time when the government thinks the economy is getting better and it won’t hurt to raise the rates back up.
The Bank of Japan made the move but they did it under pressure from the Japanese government so it is really the government calling the shots.
It is similar here in the USA where the government is responsible for these low interest rates we see here today. Right now the best short term money market interest rates and CD rates are around 1% which is just one small step away from zero and that makes one wonder whether the current administration will see what Japan has done and decide to do the same thing?
Lowering interest rates is thought to help the economy because it makes it easier for people to borrow money that they will then turn around and spend. But these low interest rates haven’t been doing the job here in America as banks are under pressure to be very careful who they loan to because of all the bailouts. So, it is difficult to get a loan and additionally, people are scared right now with unemployment near 10%. People aren’t running out to get these low interest loans that will put themselves in more debt. The whole economy is stagnant and these low interest rates aren’t helping anything.
It used to be 10 or 20 years ago that interest rates fluctuated between 3% and 5% and sometimes even higher. You could certainly count on getting at least 3% for your hard earned money. But now we have an administration that is floundering and has little real world economic experience. It doesn’t know what to do and so I fear they will see what Japan has done and decide that if zero interest rates are good for Japan, they will try it over here in the United States.
