<p>It’s nice to know what the FED really thinks of savers…Although, the .2% interest is self explanatory.</p>
<p><a href=“http://www.nytimes.com/2012/03/04/business/low-rates-for-savers-are-reason-for-complaint-fair-game.html?_r=1[/url]”>http://www.nytimes.com/2012/03/04/business/low-rates-for-savers-are-reason-for-complaint-fair-game.html?_r=1</a></p>
<p>And if the low rates don’t get to borrowers what good are these rates.</p>
<p>Oh I forgot…it is about saving the banks.</p>
<p>It’s funny that people are finally starting to notice. The Fed established the zero (to 1/4 pct) Fed Funds target rate on Dec 16 2008 and has kept it there for more than three years. I have been railing about the Fed’s War on Savers for a while now. But who needs a 5% CD if you can make a 10% or 30% annual return in the stock market? Just look at 1996 -1999. These zero interest rates don’t just annoy me (due to the lack of available low risk return) they scare me. This will not end well. Aside from the various bubbles being inflated all over again by free money, look at the cost of financing our massive deficit at even 2%, or 3%, let alone a more “normal” 5%.</p>
<p>Thank you for pointing this out. Anytime anyone says that the TARP bailout didnt cost the taxpayer’s anything (because the borrowers paid back the money),ask about thi.s</p>
<p>See Japan…and i wholeheartedly agree the stock market is being inflated by cheap money,zero yield in safe investments is pushing people many people in to the casino on Wall Street…</p>
<p>You have to play the game to survive.</p>
<p>Complaining about the Fed may make you feel better but it doesn’t change anything. If you doubt this, please see how successful Ron Paul has been.</p>
<p>If most of the world’s central bankers are in collusion (and it appears that this is the case), then they can keep the illusion going for a long time.</p>
<p>The best trader that I know has moved 70% of his portfolio into dividend stocks as he is now officially retired (he had several false starts) and the remainder is 15% cash and 15% trading portfolio. He’s basically taking trading profits and moving them into dividend stocks. Savings accounts are not mentioned of course - who would bother?</p>
<p>The S&P is up 9% for the year. That would normally be a good year.</p>
<p>9% up in 2 months when few experts in late 2011 called for much more then that for the entire 2012…not one for conspiracy but the invisible bids in the market make me nervous and suspicious…</p>
<p>Bc, David Stockman is one who would bother…100% cash… Nice quick article in USA Today,money section…it can be read online</p>
<p><a href=“Custom Domain by Bitly”>Custom Domain by Bitly;
<p>Stockman is in Treasuries and Gold.</p>
<p>Strange position - if you feel the system is going to collapse, then the dollar would lead the way. Why not own foreign currencies too?</p>
<p>A lot of elderly people do not and cannot afford to play the game. I look at my 95 year old father who fortunately was very conservative with money his whole life, getting by on hardly any yield on his cds.</p>
<br>
<br>
<p>That’s the hand that we are dealt though and we all have to make our decisions on how to play that hand. Our government and central bank feels that it’s the best way to run things and they have the power to control how the system works.</p>
<p>The best that we can do is to navigate that system to the best of our ability. Clearly it benefits some people and hurts a lot of other people.</p>
<p>I wouldn’t trust my judgement when I’m in my 70s, 80s and 90s to trade anything. I’ll be glad with 1% interest rate.</p>
<br>
<br>
<p>I plan to keep trading but have trained the kids so they can manage the money if I can’t.</p>
<p>My mother did a good enough job with blue chip stocks. Maybe there’s something in the genes.</p>
<p>There are winners and losers…</p>
<p>If somebody has 400,000 in savings and was making 5% a year…they made 20,000.</p>
<p>Now that income is pretty much gone. For many savers…SS is pretty much it.</p>
<p>BCEagle91…you are feeling pretty good about yourself. You made some very good decisions. We have a saying…“Your … is smiling”. That’s a good thing.</p>
<p>Your mom set a good example.</p>
<p>I just look at people that did the best they could…and these interest rates are causing them lots of problems.</p>
<p>It’s not like inflation is zero. </p>
<p>This FED policy costs me a lot more than healthcare. :)</p>
<p>Maybe next thread should be employer sponsored retirement plans…</p>
<p>Does anyone know anything about estate put bonds for senior citizens? My mother who has always been successful with CD laddering has given up due to the OP’s article…</p>
<p>These have been described to me as income producing but with protection of principal with a put option for the estate…</p>
<p>I have been researching online, but would like contrary opinions…alot of brokers are using these instead of CD’s for retirees…</p>
<p>Rodney…I kind of liked those in the past…but I haven’t looked at those for awhile.</p>
<p>The ones I saw a few years ago…the bonds would be sold at death and the estate would receive par. If rates went up…they would probably be pretty good for the estate. If rates went down …the estate woukd have to reinvest at lower rates.</p>
<p>I am just talking in general now…I don’t know the details of any particular bond issue…</p>
<p>There are a lot of questions…</p>
<p>What are the rates…what are the bonds? How safe are these bonds? How liquid are these bonds if these bonds need to be cashed out early? Etc…</p>
<p>^^all questions I will be addressing…apparently the bond coupons are at round 3% right now…</p>
<p>My main question is regarding liquidity if redeemed early…in an emergency, etc…I will let you know; have a conference call scheduled later in the week…</p>
<p>Given where interest rates are, it is a good bet for the estate…um, yea…even if rates don’t move at all…</p>
<p>Ok…3%…if the buyer doesn’t live long…these could be alright. I know…kind of morbid.</p>
<p>From what I have been told, it is not supposed to be used for everything. Just instead of CD’s…I think they are with about 15 yr maturities so I guess if the bond holder outlives the bond, they can redeem or rollover…</p>
<p>There are not too many 15 year cds our there…but have you checked the rates on those? </p>
<p>Or on 10 year cds…</p>
<p>Because if there higher paying cds out there…you may be better off those…even if those have a 6 month penalty to get out attached to them.</p>
<p>For example…</p>
<p>A 15 year cd pays 3.5% a year with a 6 month penalty for withdrawal…or you can buy a cd that is 15 years or matures at death…that yields 3%.</p>
<p>If somebody needs or wants to get out…after a little 3.5 years…you are better off with the 3.5% CD and no death put.</p>
<p>You can run various scenarios…</p>
<p>I would check to see what cd rates are for 15 years with and without the death put.</p>