As I’ve been railing for years now, if you have any savings and are keeping it out of exposure to the phony propped-up Wall Street casino, you are being robbed. Even the Fed apologists at cnbc (CNBS).com appear to have noticed.
from Jeff Cox at cnbc.com
Since 2006, the S&P 500 stock market benchmark has surged more than 60 percent (and more than 200 percent if you count from the time the bull market began in 2009). In the same period, however, folks squirreling away their money in savings accounts have lost nearly $8 billion.
Both results are due in large part to a Fed policy that has sought to push money out of zero-yielding savings and money market accounts and into riskier assets, particularly stocks. (Households have about $8.4 trillion in time and savings deposits, along with another $1.05 trillion in money market funds, according to Fed data.) The goal is to create a “wealth effect” that spreads through the economy, though economic growth throughout the post-financial crisis recovery has been mired in the 2 to 2.5 percent range (these numbers are even suspect)……
NerdWallet took those rates, then applied them to average disposable personal incomes and used as a baseline a $25,000 high-yielding account to figure how much savers have lost in the periods. All totaled, the site figures savers have lost about $7.7 billion during the decade…..
• source: cnbc.com
Now imagine having $150,000 sitting in a money market account!@#$%
After 6 Years Of QE, And A $4.5 Trillion Balance Sheet, St. Louis Fed Admits QE Was A Mistake
…..So in sum, the vice President of the St. Louis Fed has taken a look around and discovered that in fact, not only have trillions in asset purchases not worked when it comes to creating “healthy” inflation and boosting growth in the US, these asset purchases haven’t worked anywhere they’ve been tried. Furthermore, he’s noticed that central bankers that adhere, in a perpetual state of Einsteinian insanity, to the Taylor principle, will never be able to raise rates and finally, he thinks that the more the Fed talks, the more confused the public gets about what it is the central bank intends to do.
• source: zerohedge.com
Former Fed President: “We Injected Cocaine And Heroin Into The System To Create A Wealth Effect”
Just two months ago, former Fed President Dick Fisher admitted that “The Fed front-loaded an enormous market rally in order to create a wealth effect.” Today he is back, taking a victory lap onthe 7th anniversary of the crisis lows by explaining, rather stunningly, to CNBC that “we injected cocaine and heroin into the system” to enable a wealth effect (that he admits did not work, despite its success in raising asset prices), and “now we are maintaining it with ritalin.” Fisher also confirmed his previous warning that “The Fed is a giant weapon that has no ammunition left.” ( …and the schills giggle)
Understanding Failed Policies: Wealth Effect, Wage Effect, Poverty Effect
by Charles Hugh-Smith of OfTwoMinds blog
Central banks’ attempts to boost borrowing, consumption and wages by inflating asset bubbles leads to the poverty effect, not the wealth effect.
Simply put, central banks’ attempts to boost borrowing, consumption and wages by inflating asset bubbles leads to the poverty effect, not the wealth effect.
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[…] Fed’s regime of ultra-low interest rates, over the past 10 years, Bloomberg estimates that about $8 trillion has been confiscated from savers – money they should have earned in […]