Tuesday, April 28, 2009

Bank savings interest rates are lower than a conservative's belly

You would think that with the banks unable to lend much money because of liquidity problems that they would want to attract deposits. For every dollar a bank has on deposit the Federal Reserve will print up ten dollars to lend the bank at interest rate that is today about zero. Instead the banks are paying as little as .05% on savings accounts; effectively a zero return.

This should have the Obama Adm. concerned. One of the reasons we got into this mess was that people couldn’t get a decent return on savings and went looking for other things to invest in. Things that turned out to just be a series of big bubbles that inflated the economy. This hid the fact that we didn’t make anything anymore. This also gave the Chinese the illusion that we could somehow pay for all the stuff we were buying from them.

Of course we are still buying a whole lot of stuff from China and we still have no way to pay for it. Maybe Obama thinks another bubble would be OK or maybe he has a plan or maybe he is too busy with other things. Did that pig just sneeze?

3 comments:

Anonymous said...

Hello Prairie2,

Your comments on the Malloy show have been
interesting, to say the least, for a long time.

Given people are generally scrambling to pay off
debt and get ready money for troubling times
ahead, it is hardly surprising that people are
not locking money into savings like bonds.

Who wants a ten year bond when one might need
everything they can get their hands on at mere
months' notice?

Getting a zero interest - effectively - on savings
makes them utterly unattractive, particularly since
that very currency might lose a lot more value
(dollars and UK pounds in particular).

*

Your vote for the movie we're living in did not
include the works of that great sage Phillip K. Dick,
who quite accurately predicted that we would all
eventually be slaves to ghastly corporations.

See the world of Blade Runner (PKD- 'Do Androids
dream of electric sheep?') or 'A Scanner Darkly',
or 'Minority Report'. That is the world we are
living under - not of a pure fiction writer but
something altogether more horrifying. PKD saw
that we would fall to existing under corporate
control and work for their interests at every level.

-glenn_uk

Anonymous said...

Hello Prairie2,

Your comments on the Malloy show have been
interesting, to say the least, for a long time.

Given people are generally scrambling to pay off
debt and get ready money for troubling times
ahead, it is hardly surprising that people are
not locking money into savings like bonds.

Who wants a ten year bond when one might need
everything they can get their hands on at mere
months' notice?

Getting a zero interest - effectively - on savings
makes them utterly unattractive, particularly since
that very currency might lose a lot more value
(dollars and UK pounds in particular).

*

Your vote for the movie we're living in did not
include the works of that great sage Phillip K. Dick,
who quite accurately predicted that we would all
eventually be slaves to ghastly corporations.

See the world of Blade Runner (PKD- 'Do Androids
dream of electric sheep?') or 'A Scanner Darkly',
or 'Minority Report'. That is the world we are
living under - not of a pure fiction writer but
something altogether more horrifying. PKD saw
that we would fall to existing under corporate
control and work for their interests at every level.

-glenn_uk

Anonymous said...

0.05% interest on savings?? Surely, you jest.

OK, I won't call you Shirley, but my "premium" savings account currently pays 0.001% - less than $12 per year on a $50,000 account.

This same bank has been trying to cajole, harrass, convince, connive, beg, etc. yours truly to move to a "higher interst account" for a several years now. I have even been followed to the door by their investment banking shills when I go to the bank to do my banking.

I get quickly identified by the teller as someone with bucks in savings and they rapidly flag down a "banker". I always wondered if the tellers get a bonus for identifying potential suckers, er, clients.

Saying thanks, but no thanks to their offer for "higher interest accounts" because I need my retirement funds in a safe, insured account is never enough for them. They are looking for money to put in the Wall Street Casino and collect fees, fees, more fees, and fees on everything.

I think banks have DELIBERATELY been giving less interest in order to steer their regular banking customers into shady investment banking with the protective veneer of a (formerly) respectable bank.

I'm not falling for it and I don't care how often I'm "referred". But I think it's a deliberate move on the part of banks to low ball savings rates because they collect much more from their investment accounts.