This is just hilarious, I have been repeating for a long time that rates will stay low for the next decade, they are too afraid to raise rate because they know the economy cant handle a 1% interest rate let alone a 1/2% rate increase. Go back a year or 2 ago when they were saying rates would be going higher in 2011 and then again in 2012, fast forward to 2012 and all they do is continue to stretch the time before they are going to raise rates. Markets are toooooo dependent on these 0% rates and BUBBLE ben bernanke will keep them low for as long as he can, my prediction is they arent going anywhere for at least another 5-10 years!
I wrote something on the impact of an artificially low interest rate in the UK and the impact. http://morganisteconomics.blogspot.com/2011/11/artificially-low-interest-rates-are.html
I just want to know when these low rates are going to benefit consumers, ohhhhhhhhhhhhh I forgot it doesnt work like that....Only ones who get to take advantage of these low rates are banks, government and big corporations, the little guys dont have any benefits of these low interest rates. We just get to park our money in banks paying out less than 1% in interest....Take a look at your credit card bill, you miss one single payment and your rate skyrockets to 30%, even paying your bill on time you still have an APR around 12-15%. All BUBBLE ben bernanke is doing is buying time because he has no clue how to fix this crisis, he thinks keeping rates low into 2014 is the answer, trust me its not, rates are going to stay at lows for years to come while they still sort out ways to fix this crisis which of course wont be fixed anytime soon.
They can't let the housing MBS the banks are still holding fall down to what they are really worth. So they'll just make the money worthless until it inflates enough to match the number they are holding on their books. Like claiming the cupcake you are holding is worth $1 million. Devalue the money enough, and that's eventually what it will cost you. On the bright side - it does save the ink from having to make changes in the ledgers....
That's what is meant by "print money to inflate away the debt"... but in doing so, nearly all American citizens will become effectively bankrupt. Some solution, eh?
Yes, yes... BUT - everyone can take solace in the knowledge that the Big Banks are saved by not having to take those losses!! And bonuses. Don't forget the bonuses.
I am getting sick of this low rate BS. What incentive does the average Joe have to save money with rates this low? People who are actually smart with their money are just getting taken to the cleaners. Good thing I am not close to retiring b/c its going to be tough sledding for anyone trying to live of income producing assets.
Now we know the TRUE function of the Fed... to allow the banks to make stupidly risky, leveraged bets with depositors' money... and if "things" work out the banks reap huge profits and bonuses... like the "nobody accountable" for real estate loans bubble. If things go sour, the Fed and tax payers make good banks' losses. Think this could be the reason The Founders and Andrew Jackson were ADAMANTLY AGAINST AMERICA EVER HAVING A CENTRAL BANK?