As long as the Federal Reserve continues to keep federal rates low, savers will be punished.
In congressional testimony on Thursday, Fed Chairman Ben Bernanke acknowledged that low rates penalize savers.
By emphasising low interest rates (good for indebted companies but bad for savers) and low wages (ditto) to help companies out of their mess, Japan's economy has depended too much on exports and is now worryingly vulnerable to external shocks.
You might wonder how QE could simultaneously hammer savers with low rates - while allowing rates for borrowers to creep up.
The longer rates are held artificially low, the more savers will suffer, and the more tempted they will be to take on risks they never would have considered.
With the Bank of England's bank rate still at a historical low of 0.5%, the BSA warned that interest rates were so low that this year savers might take more money out of their savings accounts than they put in.
Another comment from the audience had to do with the pain caused savers by the low interest rate environment.
FORBES: Fed Profits and Treasury Financing, the Good and the Bad
What's more, the evidence suggests higher inflation is depressing growth by eating into consumer incomes while ultra-low interest rates are crushing savers and inflating new global asset-price bubbles ironically, including potentially in Canadian residential property.
First savers are receiving a low rate of return on investing in short term government bonds because such investment is not economically productive.
For years the Fed has pushed and held interest rates low, rewarding borrowers and punishing savers fearful of getting their nest eggs thwacked in the market.
FORBES: Congress Ends Punishment Of Charities And Retirees...For Now
While Bernanke and company try to stimulate the economy by allocating credit and holding rates low, U.S. savers are being fleeced and induced to take on more risk.
FORBES: The Fed Has Forgotten Sound Money, And Now Just Manipulates Interest Rates
He has admitted asset bubbles are a negative side effect, or a cost as he puts it, of low rates, and has acknowledged savers are getting the short end of the stick.
FORBES: Ben Bernanke To House Republicans: QE Helps Average Americans, Not Wall Street
For retirement savers in the middle income to low six-figures range, this is a very important change.
Continued low rates are resulting in poor returns for savers, with a number of the best deals being pulled already in 2010.
Threats to the safety of savings, and the search for good returns at times of low interest rates, have been a concern for savers.
Financial criminals like these thrive when interest rates are held low for years as they have been recently because savers like the elderly become desperate for any yield they can find.
When this model creaked and crashed, the Asian crisis was about solving the mismatch of low return on investments, the banks' useless loans and savers' wealth.
At present, the main ploy is fixing interest to low levels so the government can borrow money from its captive savers at below commercial rates, while eroding its debts via inflation rising faster than the rate of interest at which it borrows.
For starters, in a low interest-rate environment, online-only banks can offer savers higher yields.
WSJ: Online-Only Banks Start to Yield More Than a Virtual Advantage
The impact on savers is always a partial offset to the benefit to borrowers of a low interest rate policy, but this combination has gone on too long.
Considering the price of credit, which, if left alone matches the needs of savers with those desirous of savings, both central planning Schools seek artificially low costs of credit.
FORBES: Monetarism and Keynesianism: Identical Sides of the Same Adolescent Coin
IFS. One is simply that many non-savers, such as single parents and young couples with children, have low incomes and high outgoings, and therefore are in no position to save.
But the low interest rates of the past several years have taken a toll on U.S. savers.
From artificially low interest rates and devalued dollars to fiscal deficits rewarding idleness, federal policies prodded us from savers to borrowers and from producers to consumers.
FORBES: Banking Trends Offer Clues To The Real Business Cycle
Savers who staked their wellbeing on the credit markets took the risk of getting pinched by low interest rates in a lackluster economy.
应用推荐