{"id":5631,"date":"2012-10-01T19:46:34","date_gmt":"2012-10-01T23:46:34","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=5631"},"modified":"2012-10-01T19:46:34","modified_gmt":"2012-10-01T23:46:34","slug":"bernanke-attempts-to-justify-screwing-savers","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/01\/bernanke-attempts-to-justify-screwing-savers\/","title":{"rendered":"Bernanke attempts to justify screwing savers"},"content":{"rendered":"

This extract from Joe Weisenthal lauds Ben Bernanke’s defense of monetary policy and its effect on savers.<\/p>\n

I would encourage you to remember that the current low levels of interest rates, while in the first instance a reflection of the Federal Reserve’s monetary policy, are in a larger sense the result of the recent financial crisis, the worst shock to this nation’s financial system since the 1930s. Interest rates are low throughout the developed world, except in countries experiencing fiscal crises, as central banks and other policymakers try to cope with continuing financial strains and weak economic conditions.<\/p>\n

He [Bernanke] then goes onto note that saving isn’t just “having money in a bank” and that the main way to benefit everyone (including savers) is to induce growth:<\/p>\n

A second observation is that savers often wear many economic hats. Many savers are also homeowners; indeed, a family’s home may be its most important financial asset. Many savers are working, or would like to be. Some savers own businesses, and\u2014through pension funds and 401(k) accounts\u2014they often own stocks and other assets. The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth, and led to sharp declines in the values of many homes and businesses. What can be done to address all of these concerns simultaneously? The best and most comprehensive solution is to find ways to a stronger economy. Only a strong economy can create higher asset values and sustainably good returns for savers. And only a strong economy will allow people who need jobs to find them. Without a job, it is difficult to save for retirement or to buy a home or to pay for an education, irrespective of the current level of interest rates.<\/p>\n

The way for the Fed to support a return to a strong economy is by maintaining monetary accommodation, which requires low interest rates for a time. If, in contrast, the Fed were to raise rates now, before the economic recovery is fully entrenched, house prices might resume declines, the values of businesses large and small would drop, and, critically, unemployment would likely start to rise again. Such outcomes would ultimately not be good for savers or anyone else.<\/p><\/blockquote>\n

In layman’s terms, Bernanke is saying that if the Fed didn’t act, everyone, including savers, would be in deep **** (trouble) …….so savers should be happy they are being screwed.<\/p>\n

via Bernanke: Federal Reserve & Monetary Policy – Business Insider<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This extract from Joe Weisenthal lauds Ben Bernanke’s defense of monetary policy and its effect on savers. I would encourage you to remember that the current low levels of interest rates, while in the first instance a reflection of the Federal Reserve’s monetary policy, are in a larger sense the result of the recent financial … <\/p>\n

Continue reading “Bernanke attempts to justify screwing savers”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,34],"tags":[1352,1858,2346,3040],"class_list":["post-5631","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","category-us-canada-countries-regions","tag-fed","tag-interest-rates","tag-monetary-policy","tag-savers"],"yoast_head":"\nBernanke attempts to justify screwing savers - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bernanke attempts to justify screwing savers - the patient investor\" \/>\n<meta property=\"og:description\" content=\"This extract from Joe Weisenthal lauds Ben Bernanke’s defense of monetary policy and its effect on savers. 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The Fed has also been suppressing long-term interest rates, with QE1, QE2,\u00a0Operation Twist and now QE3. The yield on 10-year Treasuries is now\u2026","rel":"","context":"In "Banks & Interest Rates"","block_context":{"text":"Banks & Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6187,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/11\/16\/fed-monetary-policy\/","url_meta":{"origin":5631,"position":2},"title":"Fed monetary policy","author":"Colin Twiggs","date":"November 16, 2012","format":false,"excerpt":"I read this excerpt from a speech by Ben Bernanke in September (courtesy of Cullen Roche): The tools we have involve effecting financial asset prices. Those are the tools of monetary policy. There are a number of different channels. Mortgage rates, other interest rates, corporate bond rates. Also the prices\u2026","rel":"","context":"In "Banks & Interest Rates"","block_context":{"text":"Banks & Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6875,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/04\/rate-cuts-short-term-benefit-long-term-pain\/","url_meta":{"origin":5631,"position":3},"title":"Rate cuts: Short-term benefit, long-term pain","author":"Colin Twiggs","date":"March 4, 2013","format":false,"excerpt":"Shane Oliver at AMP recently tweeted: Why rate cuts help household spending: 1\/ Aust hholds have approx $750bn in deposits but $1700bn in debt.... ...so a 1% rate cuts makes depositors $7.5bn worse off, but borrowers $17bn better off. The net gain for households is $9.5b ! Reason #2 as\u2026","rel":"","context":"In "Australia & NZ"","block_context":{"text":"Australia & NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7527,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/04\/22\/fed-watch-monetary-policy-and-financial-stability\/","url_meta":{"origin":5631,"position":4},"title":"Fed Watch: Monetary Policy and Financial Stability","author":"ColinTwiggs","date":"April 22, 2013","format":false,"excerpt":"Tim Duty quotes Minneapolis Federal Reserve President Narayana Kocherlakota, speaking at the 22nd Annual Hyman P. Minsky conference: ....unusually low real interest rates should be expected to be linked with inflated asset prices, high asset return volatility and heightened merger activity. All of these financial market outcomes are often interpreted\u2026","rel":"","context":"In "Banks & Interest Rates"","block_context":{"text":"Banks & Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8467,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/09\/23\/interest-on-reserves-settlement-and-the-effectiveness-of-monetary-policy\/","url_meta":{"origin":5631,"position":5},"title":"Interest on Reserves, Settlement, and the Effectiveness of Monetary Policy","author":"ColinTwiggs","date":"September 23, 2013","format":false,"excerpt":"Joshua R. Hendrickson suggests that paying interest on excess reserves at the Fed reduces the effectiveness of monetary policy. Money paid to purchase Treasuries finds its way back to the Fed in the form of excess reserves. Here is the abstract from his paper: Over the last several years, the\u2026","rel":"","context":"In "Banks & Interest Rates"","block_context":{"text":"Banks & Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5631","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=5631"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5631\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=5631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=5631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=5631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}