Sep 23, 2015
Few, Of Retirement Age, Can Now Retire On Their Savings. WHY?
Common Sense Commentary: It is an abstract fact. Let me say, first of all, that the Federal Reserve Banks (FED) are no more "Federal" than "Federal Express". It is owned by multinational bankers. However, the U.S. President appoints its members, here, and thereby has influence over it. Presidents and Politicians, as an elite class, have learned well how to raise the people's taxes without actually raising what is called "taxes". By doing so they separate themselves, abstractly, from a direct connection to these "secret" taxes. So how do they do it? They have two ways. The first way is by secretly having the FED hold interest rates near zero. This helps our government pay its own huge national debts ($18 thousand billion or 18 Trillion, in the U.S.) with practically no interest on that debt. At the same time they give banks government loans at 1 or 2% interest to loan out at 4 to 26 % interest to their customers. That also helps all debtors, private and public with low-interest loans on homes, cars etc. But the vast majority of retiring and retired people cannot live on earned interest rates that low (1 or 2%). Tiny interest rates is a secret, unseen tax on savers, and an income benefit for debtors. The second way Politicians get the money for all of their high living and funding for foreign aid and other give away programs, to buy votes, is by simply printing as much money as they want out of thin air. No silver or gold backing it up. Today they actually print it digitally and spend it out by punching a computer key. This method also, is too abstract for people to understand that it is actually a hidden tax on everyone, especially savers and the old. How? It's called inflation. Retiree's income goes down and younger people's income usually goes up a bit until the whole system gets out of control and they lose those jobs. You see, every time a new dollar or billion dollars is printed, the dollars in your savings or checking accounts are diminished in buying power and your salary doesn't go quite as far. So when groceries, gas and everything goes up, the people blame the grocer, oil companies and every other business instead of blaming the Politicians who did the evil deed in the first place. So the politicians join in and blame businesses who were forced to raise prices to offset increased costs. Here is an excellent article on the subject. RB
One of the biggest robberies in the history of mankind is happening right now.
Strangely, few seem to notice.
Maybe that’s because the perpetrators are wearing suits and ties instead of ski masks. They use complex economic jargon instead of guns. And the media treat them with respect.
None of this changes the nature of their actions. They’re still taking without consent. The result is no different than if a thief picked your pocket.
Here, though, most victims don’t even realize they’re victims. The most prominent victims are retirees.
Retirees depend on the investment income earned from their life savings to pay the bills. The amount of income generated depends on interest rates.
You see, market forces don’t set interest rates. A politburo of central planners—who call themselves central bankers—set them. The Federal Reserve is the US’s central bank.
Central banks make the absurd claim that they operate independent of politics. In reality, they’ve always existed to please politicians. Their actions usually come at the expense of prudent savers.
For years the Fed has set interest rates lower than they would have been absent its intervention. It does this in the mistaken belief that it will benefit the economy by boosting spending. But encouraging spending just for the sake of spending isn’t sound economics.
Debtors also benefit because lower interest rates mean lower interest payments. And there is no bigger debtor on the planet than the US government.
Artificially low interest rates pump massive distortions into the economy. The results are disastrous for retirees.
Back in the year 2000, a five-year certificate of deposit would pay out about 6%. If you had $1 million, you could generate $60,000 per year with little risk.
Fast forward to today. The average CD now pays a meager 1.5%.
You now need $4,000,000 in retirement savings to generate that same $60,000 in annual interest income.
Saving money is four times harder than it was just 15 years ago, and the Fed is the culprit.
The Fed is siphoning money from savers by setting interest rates lower than what the free market would. It’s an enormous—but hidden—wealth transfer from savers to debtors. It amounts to one of the biggest swindles in world history.