I can't put together such a thorough post on the topic as Shannon would, but in response to all the recent government economic intervention, I wanted to revive the discussion.
With the fed bailing out banks, and lowering interest rates, and whatever else they're up to, I can't help but wonder what effect it will have on trends like this.
Personally, I'm trying to save tuition for next year (when I'll be jobless, going to class full-time) in a high-interest savings account. It was nice at first, at 6% interest, but now it's down to 3.55%. Compound that with the effect of inflation, and it's tough-going if you're trying to be financially responsible / conservative these days.
I find myself aggravated at our nation's irresponsibility and near-sightedness. Is it wrong to feel like I'm paying for other's ignorance w.r.t. lending/borrowing, credit, spending (both at an individual and governmental level)?
What's your disposition?
Monday, March 17, 2008
Inflation
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3 comments:
First off... 6% interest... wow thats pretty good. I thought I had a good rate at 4.25 a while back with ING... now down to 2.X What bank/institution are you using?
You are not alone in your disappointment of the current action of the federal reserve. It's a frustrating feeling when you're trying to save money, but at the same time your actually loosing money because of some fed board members decide it's best for the market to bail banks out of trouble and inject large masses of cash into the system, which is used by those at the top and doesn't really help us at the bottom. It creates inflation... and like Ron Paul says you can look at it as a tax.... with no representation.
When I think about this situation I have hope that our government will one day manage a budget that doesn't put our nation into debt... but I believe that will never happen until the people of this nation live by the same standard in a personal manner.
One negative/positive thought in ending.... if we get rid of Bernanke and put someone who has better long term vision in his place, we may quickly march down the road of recession (negative, but tis the way of economics), but at least we'll get some crazy interest rates (positive - if you have cash), like 15 - 20% to help curb inflation and clean out the system. Basically what happened in the 70's. If any of us have any money and a job by that point we'll get some decent return on it.
1. I use HSBC Direct
2. It probably won't even be 3.55% by the end of the week since the fed is at it AGAIN
Oh boy. Capital seeps away. Part of the problem with what's going on, is that for a capitalistic system to work, there needs to be *gasp* capital! The debt culture Matt alluded to, combined with the reckless policies of the Fed and equally reckless government spending puts everyone on the rocks. So those of use smart enough to collect a few percent in interest unfortunately aren't even keeping up with the rate of inflation. To top that, the government keeps changing the way they calculate inflation (that's one way to keep it down!) and it's likely real inflation is somewhere near 10%. In other words, even with a generous yield, you're still losing your own money.
Remember- not disappearing. This is a redistribution of wealth to the wealthy bankers, just as our income tax is a redistribution of wealth to government-selected vendors, like KBR/Halliburton.
i have a limited understanding of this, really. Am i wrong in thinking that it's actually in the bankers' interest to increase the amount of money in the system? Doesn't this shift the balance of wealth into their own coffers? Aren't economic problems a convenient pretense to do this?
Does anyone know about the allegation that the banking system created the conditions for the Great Depression so they could consolidate all the little banks and convince the Federal government to give up it's own constitutional right to control it's own currency and money supply?
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