We're being financially repressed

http://www.youtube.com/watch?v=GS_1bzaj2fw

A giant papier mache piggy bank will take a hammering outside the Bank of England as angry savers show the brutal effects of record low interest rates on their cash.

Campaigners warned that savers are being taken for "mugs" as soaring energy and household costs have exacerbated the bleak future they are facing.

A combination of high inflation and the Bank of England's base rate being held at a historic 0.5% low has left savers struggling to find accounts which will give them a real return.

http://www.google.com/hostednews/ukpress/article/ALeqM5g_Q-77zAvkHX0upPdUiIljNFaN3w?docId=N0786341317865766298A

and what effec will this have on RE in Manhattan?

http://www.zerohedge.com/news/2013-03-09/jim-rogers-were-wiping-out-savings-class-globally-terrible-consequence

For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.

In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.

interesting- who are the people that are wiped out? what's their profile? are they the $50k annual income with $75k in the bank at retirement? Obviously anyone within the 1% has been diversified into stock. The general argument here, is it ideological or based on a description of a real person. Can you share?

Riverside, as a diligent saver who is seeing his life's labor slip away, thank you for your support.

My savings was earned in Japan, where the yen rose steadily from 2008 to 2012 thanks to a total lack of inflation. Since it became clear that money-debaser Shinzo Abe would be named prime minister last November, the yen has collapsed from about 77 per dollar to 95 today. That's a 23% decline in just four months! And he has said very clearly that he wants 2% inflation in conjunction with near-zero interest rates. The value of my savings as expressed in dollars is plummeting faster than I can replenish it with more savings earned from my labor. We have words for people like that: serfs and slaves.

realtime - It might not be so obvious that 'anyone within the 1% is diversified in to stock.' How far back are we talking here? Diversification may have always been the professed idea, but even when stocks were soaring twenty years ago it was still possible for very conservative folks to make a reasonable return on their savings. The idea that 'cash was king' was embedded on a generation .. sure, own your house and maybe a little stock on the side, but keep money in the bank. You could sit out the cycles knowing that yours was a long-term plan. Never before has there been such a blatant example of actual punishment for those inclined to save. And how many of those with adequate savings to retire are going to be inclined to see their savings as discretionary and suitable to put back in to the economy?

What the Fed has done is unprecedented.
M2 money supply sits at a record 10,480.5 billion(January numbers), credit spreads are at record lows, and the amount of debt on the Fed's books 3.091 trillion(March), all for purpose of bailing out banks still trading below book value. What we're seeing is a wealth transfer from savers to debtors engineered by Ben Bernanke. I actually , its not so much as a transfer but downright filching.

Now let's talk about those who have a mortgage. They only benefit a little on the refi. Stock ownership is concentrated amongst the wealthy. The one's who truly benefit are those that have primary accesss to credit like banks(again) or the largest of companies like IBM who issue their own debt. And in the case of banks, suppression of spreads and premiums is handing them huge profits in the CLO market.

What do you think happens when the Fed unwinds, or when the credit distortions suddenly end?

2 criminals obama and bernanke turned our hard-earned money into toilet paper

http://www.washingtonpost.com/business/economy/low-interest-rate-environment-expose-seniors-to-fraudsters/2013/04/18/63d065dc-9c77-11e2-a941-a19bce7af755_story.html

Senior citizens are being lured into riskier investments — and often outright scams — as carefully laid retirement plans have been scuttled by five years of low interest rates.

Government data show that investment earnings accounted for nearly 10 percent of income for Americans 65 and older when the recession began. In 2011, the most recent full year available, they made up just 6 percent of seniors’ income. Instead, seniors have become more reliant on Social Security, pensions and public assistance.
Government regulators and advocacy groups say unscrupulous dealers are taking advantage of a growing fear among seniors that they will run out of money in their final years of life. That’s in large part because many seniors have parked their cash in safe investments, such as government bonds, where returns have barely kept pace with inflation. As a result, their savings are stagnating as their life expectancy grows — and that is making many older Americans increasingly desperate.

Seniors have long been a favorite target for fraudsters. People 60 and older make up 15 percent of the population but are estimated to account for 30 percent of investment fraud victims, according to AARP. They are more likely to have lump sums of easily accessible cash, a lifetime of savings intended to last through their golden years. Many seniors use the interest on those savings to cover their daily expenses and maintain the nest egg for emergencies or inheritance.

But that has gotten harder to do in the aftermath of the financial crisis. The Federal Reserve began slashing interest rates in 2008 and has kept them near zero ever since in hopes of stimulating consumer spending and boosting the economy.

Since when getting a high return from a saving account an entitlement? Consideration of liquidity, return and risk are always trade offs when making your decisions. Nothing has changed.

Fed action is all about causing negative short term real interest rates. If the Fed ended Q.E. and allowed the market to set the short term interest rate, rates would be higher.

i think you may have topped yourself in terms of obvious and stupid statements.

Hi C0C0!