(10-21-2011, 02:16 PM)kandrathe Wrote: 1.06% for a 1yr CD? 1% savings rate if you can find it? If you can save up $10000, and save it in a bank, then after a whole year you'd get $100. Wow.
Banks set the interest rate, not the government. The US government shouldn't be able to keep (inflation adjusted) interest rates down. And since banks and savers rationally adjust expectations for expected inflation... this really isn't in government hands. Anyone worried about inflation will just hold gold instead of cash. Anyone uninterested in inflation will hold bonds instead of gold. Both are sky high.
Coxon, and many like him, have been singing the hyperinflation song for years now. Hasn't happened.
Quote:The US government is paying the banks for excess reserves, which in effect is paying them to keep the money out of circulation and keep inflation in check.
Um, okay... Since the Fed is *trying* to generate inflation, what sense does this make? They triple the monetary base (apparently on a whim?) and then pay banks to not circulate it?
Regardless, a bad economic outlook is not the same as the "system" being "rigged" against savers.
-Jester