April 05, 2008

Savers - the most screwed class of all, hated by Ben Bernanke


* Savings accounts, bonds and CD's paying pretty much next to nothing

* The US dollar getting more and more worthless by the day

* Inflation roaring (and a lot more than the government reports)

* No safe alternates

Ben Bernanke has pretty much told savers to go f*ck themselves, while rewarding people and businesses who racked up massive debts. I'll still take cash over debt (and steak over ramen) any day, but Bernanke is savers' public enemy #1 for sure

The US already has a negative savings rate, and with no incentive to save, I'm not sure how that will improve any time soon.

But you want a solution? Congress needs to make interest earned on savings accounts and CD's 100% tax free. And they need to dramatically raise the limits on what can be saved in a Roth or IRA. Immediately. Now.

But of course, they won't do that, as that would be the competent and correct thing to do. And they've got housing gamblers to bail out first. F*ck savers. F*ck under-consumers. This is America - land of credit cards and debt! Get out there and spend - don't save!

25 comments:

Anonymous said...

Keith,

Berneke has writen 14 papers on how to solve the zero bound problem. This is how to FORCE inflation down our throats even with interest rates at 0%. Japan? No. Weimmar? Yep! Many accademic wanna be's like Mish Shedlock continue to argue Japan. This is dangereous! Folks, do yourself a favor. Go out and get yourself some junk silver while you still can. You just might save your families life.

And Keith, how about an entry to discuss peoples recent experience with the run on physical silver? I spent a week calling around to find some.

Ed said...

You still don't get it. Just like you don't get why there will be a bailout. It's very simple. More people are borrowers than savers. Politicians need majorities to win. So they cater to the majorities. If the majority of people had pink hair, they'd have a pink hair tax cut bill.

Start Public Executions televise on all channels said...

Kill the Guilty.

Do it NOW.Star

YoungExec2B said...

To encourage saving, Canada has introduced the Tax Free Savings Account. With a limit of $5,000 after-tax dollars a year per person over 18, Canadians can invest in just about anything without paying ANY tax on the returns. No income tax, no capital gains tax, no nothing. Canadians take note:

http://www.cbc.ca/news/background/budget2008/pdf/tax-free-savings-account.pdf

This will definitely convince me to save. Between my wife and I, we can contribute $10,000 a year, for 24 years until we retire. A 7% ROI gives us over $630,000. Not the millions people say we need to retire, but we don't pay tax on it, so it's as good as a million.

Afterthought said...

There are moral effects of this as well;

saving is the action of the modest, prudent, thoughtful person.

We diminish those virtues in society and replace them with "sub prime" morality.

As with manufacturing; when you no longer manufacture; the college students don't want to study engineering; the tradesmen don't take up machining or tool making; it gets lost from the culture; replaced with "med school" and MBAs.

Anonymous said...

wisebread.com: Savers suffering as rates fall--what to do?
http://tinyurl.com/4ca7uy

I am soin this boat right now..

I have $10K in USD I need to somehow protect and no clue what to do with it...

I may just max out the two ESA's I have at Vanguard for my kids for the year, and also open them each a $1000 UTMA Vanguard Star account. $1000 USD might be worthless in the short term but, maybe by the time they retire in 60 years it might be worth something....

other options on where to invest it...

Guns, Bullets, and Food.
Wall Safe.
Gold / Silver / Platinum Index Fund?
I have no friggen clue...

Anonymous said...

Doesn't this go back to the whole debt as money issue. If you need debt to make the system work, of course you would hate savers! They are not helping Bernanke's plans. No shock here...

Lady Di said...

I just received my quarterly statement for one of my savings account - .75% in interest.

Pathetic.

Thanks for screwing me Bernanke.

can't make this up said...

WaPo gossip column says Ben Bernake seen at a local theater. Guess what play? Death Of A Salesman, in which middle-aged Harry Loman gets sacked in a downturn and commits suicide.

Anonymous said...

The gamblers are tapped out along with the banks. Now they want our money to feed the economy. The penelty for not playing the game is inflation and the lost value of the savers wealth.

What too do?

Jim said...

Massive savings on the part of the average Japanese is what has enabled them to live through the last 20 years or so since their bust. Americas have no savings, no cushion - nothing and won't be faring so well.

Frank@Scottsdale-Sucks.com said...

As Kiyosaki has said for years:

Isn't is suspect that government punishes you via taxes for saving money, but rewards you via a tax deduction for going into debt?

Keyser Soze said...

My newly-retired brother finally understood what I meant by 'War of Savers' when his $100,000 CD went from 5.5% to 3.25% this month.
After 50+ years.... he finally realized I wasn't the dumb phuck he used to beat the shit out of, oh so many years ago!! Okay, maybe that's a bit of a stretch, but as my favorite saying goes..."Never let the truth stand in the way of a good story." I never do!!

Peter T said...

To count interest fully as income is indeed screwing the savers. Interest is to a larger part compensation for inflation, which should not be taxed at all. I try to avoid that tax by saving in a Roth and let the interest become tax-free retirement money. I can also do that, because I save for retirement in a 401k, but what about people, whose IRA is their only retirement option, so they can't use it for tax savings?

Anonymous said...

I'm diversifying. I have a Glock, Bersa, Marlin, and Remington all with lots of ammo. I also have a good supply of dried food and water purifiers. When the SHTF, the economy will come to a grinding halt for a few months. There will definitely be food shortages and possibly a water shortage as well. I suggest 2-3 months worth of food because if it lasts longer than that, there will be a mass die off where you don't want to survive.

Refuse to buy overpriced said...

Ed, what kind of a Republican are you? Our party doesn't need cynical, discouraged people who give up without a fight.

A majority can be assembled based on correct principals, not just self-interest.

If Bernanke does resort to hyperinflation, he will destroy the Federal Reserve like Nicolas Biddle destroyed the Bank of US. Americans won't tolerate abusive unelected power.

theskaven said...

My CD's are all doing well. That's because they're in China, Aussie, New Zealand..

Funny thing, Bernanke is wrecking the dollar to create liquidity and it's not working. We are headed for deflation no matter what, except that the dollar will also plummet, so now we'll have the deflation that has been scaring the snot out of Ben AND a falling dollar.

Great job, Ben! Word to the wise, get your money out of dollars, now! China is already imposing a $50K/person limit on conversions of USD to RMB, how long until other nations start to do it too?

Matt C said...

Refuse to buy overpriced said:

"Americans won't tolerate abusive unelected power."

Bullcrap. They already have. And the Fed won't be destroyed by hyper. They will metastesize INTO the US Government. You have to understand, that when the US banking system is nationalized, it will be the nation that is rulled in full by the banking elite.

F. Gump said...

You don't need to worry about such things. Just think of gold as your new currency. Buy the GLD to store value and cash in shares for living expenses. It's that easy! Oh, and keep a bit of the real thing on hand just in case all hell breaks loose.

Michael said...

Bernanke is average working Americans public enemy #1. How can we fight back against the Fed raising the price of everything on us through inflation? Stop buying everything unnecessary now and stop driving unless it is totally necessary. We should threaten to do this for 6 months, unless Bernanke stops with the attacks against our earnings. Just think of all the deflation we would cause, combating the inflation, if we did this.

bearzilla said...

Since the bankz are screwing the depositor, return the favor and take your money out of the bank. if you are uncomfortable leaving your money buried in your yard in a pvc pipe bank, then open a safety deposit box with the same bankz, but deny them the use of your money!

this isn't gold, but it is as close as most of you will get!

mairca izda debol said...

i would divirsify into canadian and australian govt bonds

Anonymous said...

I spend my $ as soon as I get it.

Anonymous said...

on AMMO!!!!

anon e. moose said...

And I f*ck them right back by consuming less and less.
That rebate check... is going into savings.