August 25, 2010

NOW LET US PAUSE TO CONSIDER...:

FED TO SAVERS: DROP DEAD (James P. Gannon, 8.25.10, American Prospect)

Thoughts while pondering the 43 cents of interest I earned on my savings.

A few days ago I received my monthly statement from Fidelity Investments, where I keep some of my retirement savings. It told me that the cash I keep in a money market account there is earning an annual rate of interest of 0.01%. Yes, that is one one-hundredth of one percent.

I have enough cash in that account to buy a fancy new car or take a glorious long vacation but it earned me the grand sum of 43 cents in interest in the month of July. I might as well have the cash buried in a coffee can in my back yard.

What this tells me is that our economic policy-makers in Washington don't give a damn about savers. The Federal Reserve is holding short-term interest rates to near zero in a monetary policy that could be reduced to a headline like one that became famous back in the 1970s: FED TO SAVERS: DROP DEAD.


...that for the past twenty years, when our betters have been telling us we ought to "save" like the Japanese, this is what their savings have been earning them.

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Posted by Orrin Judd at August 25, 2010 5:39 AM
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