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We should take a flame-thrower to the place!!!
Courtesy of the SlealthFlation Blog:
" Miss, I would like to open a passbook savings account please. Teller responds; I haven't opened up one of those for a client in ages, I'm not even sure if we still offer them anymore sir. Let me check with the head teller, I'll be right back with you. "
The fact that the average decent working American is no longer able to take his hard earned income to a local retail bank, so as to earn 5% nominal interest in a traditional, conservative and secure savings account is an abomination of epic proportion. What ever happened to the fundamentally intrinsic time value of money?
To paraphrase Al Pacino in Scent of a Woman, from his magnificent rousing speech at the Baird Academy auditorium; We should take a flame thrower to the avaricious parasitical financial sector...............
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The flame-thrower has already arrived.
It's called bitcoin.
Here's the truth, believe it or don't.
http://patrick.net/forum/?p=1223928
The Corzine rule applies to all accounts: "Your funds are safe with us so long as we don't have access to them."
An American, not US subject.
Bruno & Anyone else:
UK Probably has this too, USA has 770 Accounts which are Taxfree Insurance (life) policies which grow Interest near the 5% level according to some links. IRS has no surveilance over these accounts and you can take dividends and withdrawl with no taxes taken out. Might be an Age parameter for withdrawls.
Anyone familiar with these? Probably they would be put into some Derivetive scheme and therefore only valid for the life of the Insurance Company providing these (thinking financial crash in USA coming soon).
Supposed to be a secret tool of the rich to avoid taxes and ZIRP on Individual Savings Accounts.
http://www.stockgumshoe.com/reviews/palm-beach-letter/secret-770-account...
http://www.foxbusiness.com/personal-finance/2014/06/26/tax-story-behind-...
http://www.irs.gov/irb/2005-06_IRB/ar12.html (7702(a)(b)(c)(d))
Thank you for that. FWIW, standard local retail banks are insured by the FDIC, insurance compaines are not? Also, surely those investment vehicles you speak of are not as liquid as your basic local branch saving account.
This financial engineering everywhere you turn is bad news.................
Not sure if FDIC applies to Life Insurance, but the IRS code that I have seen so far states that these must be considered "Safe Harbors" whatever that means.
There is probably more Financial Law that stipulates that these schemes are conservatively based.
I probably know less about Insurance than anyone else on this board though.
ADD: I should add that these 770s appear very much like annuities. In fact I want to get back with a friend as I think he has one Valued at like $80K USD which pays 7% as of last September. He take like a monthly payment or something.
Followup: Insurance guy/broker says "yeah, 700 series is IRS section on Insurance, but this must be false".
But he serves the middle class, so WTF does he know?
I have a passbook account, though I don't get 5%, that's for sure.
Balance is important and like so many things in life when it comes to economic policy it is very important to balance the markets reward when it comes to savings and debt. Savings plays an important role in the economy and has been shortchanged, this will come back to haunt us.
The idea of being frugal and living within our means has not been given due credit, living by increasing debt is far too acceptable. When we find it necessary to discuss savings we are back to basics and it is a sign we have strayed far off course in our economic policy. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/09/savings-and-role-it-plays-in-econ...
The American Empire, wedded to Zionism and a World Government empowered by Globalist Banking and Multinational Corporations, is the chief enabler of evil on this planet.
Better take a flame thrower to the governments and their central banks.
None of this nonsense would be possible without fractional reserve banking, fiat currencies and central banks - all GOVERNMENT-installed and protected.
Savings account? Over the summer IRS sent everyone I know fake bills with huge fines for "past due taxes". Oh, you oh us $200 from 2007.. that comes to duh, $12,000. Now thats Organized Crime.
Savings? You know the south park vid...
You mean,,,this one?
http://www.youtube.com/watch?v=4TlPo0yCSa4
Why should the government or a bank guarantee a rate of return that is in excess of the economy's rate of growth? Seems to me that demanding 5% on a 'no-risk' savings account is little more than asking for welfare.
A bank or the government should not "guarantee a rate of return." The market should determine the rate. The ancient virtue of thrift is under attack to support the ancient vice of reckless oligarch larceny and “Keynesian” spending. The oligarch lie of low inflation and subsequent low earnings rate on the use of savers' money, is meant to take the people’s money. That’s the reason for engineered inflation.
The Fed is trying to stimulate growth by printing money and deficit spending financed by the Fed’s printing press rather than through invested savings. This is not the real growth of a healthy economy; it merely reflects the bankruptcy of current economic policy.
There’s nothing lower than to lend support to the debauching of the currency. What spotty deflation there will be, if any (in 2008 the U.S. was wrestling with the worst food inflation in 17 years), is just a momentary pause in inflation. Inflation is the lifeblood of America’s tyrants. And what do they want? They want the product of your labor, so they can put it in their pocket. And they will use any CPI lie to achieve it.
It’s savings that creates jobs. Dissavings is a job killer.
Henry Hazlitt was a natural born economist; one of America’s greatest and most relied upon for decades. Here’s what he had to say about interest rates:
“The interest rate is merely the special name for the price of loaned capital. It is a price like any other… To argue, on the basis of an extreme example, that the volume of real savings would not be reduced by a substantial fall in the interest rate, is like arguing that the total production of sugar would not be reduced by a substantial fall of its price because the efficient, low-cost producers would still raise as much as before…
“The effect of keeping interest rates artificially low, in fact, is eventually the same as that of keeping any other price below the natural market. It increases demand and reduces supply. It increases the demand for capital and reduces the supply of real capital. It creates economic distortions.” – Henry Hazlitt
AS he said in Inflation vs. Immorality:
"During every great inflation there is a striking decline in both public and private morality…"
The Fed and it’s paper money machine is not creating a great republic based on sound money and freedom; it is confiscating the people’s wealth and their standard of living through inflation and big government and financial tyranny.
No one mentioned a guaranteed rate of return? The fundamentally intrinsic time value of money on deposit should always bear a rate of interest at least higher than the rate inflation.
In my view, money should always have a fundamentally intrinsice time value to it. After all, it is supposed to represent work having been done, and that always has a time value associated with it.
The 300 year history of B of England says money has always received interest. ZIRP is corporate welfare. Ultimately, it's a banking takeover of the economy, comrade.
Since when were saving account rates ever guranteed Pitzy, the banks were simply paying time value on money deposited with them above and beyond the inflation rate......................
Unlike your Goldman Sachs Mommy's boys who went running and crying to Mommy for their gurantee when they needed it, courtesy of the U.S. tax payer...............
"guarantee" for the purpose of my comment referred to the guarantee of principal being repaid. Of course, if you want that these days, you only get 1%, if even, so asking for 5% is like asking for welfare.
I posted similar statements as Bruno over the last 2 years.
The FED & TBTF Banks are gaming the system and everyone has been paying over and over for mistakes in Governance & Stewardship of the US Petrol Dollar. Real Leadership has to acknowledge that those with the advantage of being able to create money from nothing need to stop what they are doing. Real Leaders would demand new plans after 5 years of ZIRP Manipulation.
You are right though in that you have an IOU from the Bank, your money is not in that account.
time Value of Money, however, shows us terrible inflation taking place notably in Federal Spending & Private Executive Compensation. I want my interest based on real Inflation that we see in the expansion of US Financial Instruments and Money Supply. Think $1.8 Quadrillion in Derivatives.
Anyway what kind of Banking System do we have in USA, UK & EU???? It used to be that banks used and relied on Savings Deposits in order to make new loans, and then new loans stimulated the economy. No now. That is over. Maybe Debt is the economic driver, but I can't explain it fully in the contest of banking. I know we have a debt based economy, that we have Usury taking place, that the Government shouldn't have to pay interest when it creates money... but of course it has no control over the Federal Budget or the Wild Eyed Bankers.
You demand Integrity. Fine. But the whole system is complicated and corrupted more easily by it's complications. The answer must be found in Dissolving or breaking up the behemoths on Wall Street. Standardized Financial Instruments & Standardized Accounting & Standardized Financial ratings with Full Integrity and no Conflict of Interest.
And why don't you have concern for the elderly, the infirm, those on fixed income, and those that don't have insider information to help them keep & grow their wealth.
The Middle Class is deep in a decade long Attack by the Smart Financial Schemers.
Get the fucking Fed out of the rate-fixing business and see what happens. Oh yeah, also tell them to stop buying the shit out of every piece of paper they can find.
You put the bad banks that are currently receiving corporate welfare out of business. Then, let the free markets set interest rates on the remaining deposits. It's not that hard.
Well there are many Federal Government Contracts... aside from the contracts provided by the US Federal Reserve to ... TBTF Fraudulent Banks on Wall Street... There are two big Moral Issues when you continue to do business with TBTF & when your Federal Reserve Banks continues to feed contracts to their network, their buddies, their bed-mates...
- SNAP is handled by JP Morgan, Federal Contract
- Primary Dealers for Federal Reserve are big Wall Street Banks which have advantages over smaller banks and can create much more money at lower tax liability, It is a "Inside Job", It is "Gaming the System".
Damn It.
TBTF Caused the 2008 Financial Crisis
- Yet TBTF continue to have Prime Dealer Status
- Yet TBTF continue to have access to Federal Contracts to lend money to the US Government
- Yet TBTF Banks have free Run of all Financial Systems
Am I an Idiot or are all Government people at City, State, County, and Federal Level all... influenced to participate in this corrupt system and total yearly Fraud!!!
Answer: There was a Coup in the USA. But when was it? And how did they do it? Likely it wasn't general military people... it was some kind of inside group in Banking and Intelligence.
yeah right, we all know that wherever there's a gavel, as soon as they hit it, if you keep going, that's gounds to have thugs come beat you up and drag you from the room
LOL!
Only the Congress can end or audit the FED whose licence to steal is "In perpetuity" since 1927.
'It became necessary to destroy the town to save it', Vietnam
"Burn , baby , burn" Watts
"Burn the sacrifices" : See http://andreswhy.blogspot.com/2009/07/sacrificial-reserves.html
Then burn with longing for the good old days . See http://andreswhy.blogspot.com/2008/09/concept-of-reserves.html
Zozobra! Que viva!
The Fed is using the envy of the sheeple to wipe away the legitimate market economy, thus, removing the chance for Americans to hold any of their labor in savings. And further, the Fed enlists the avarice of the masses and the large stock market investors in its campaign to steal these savings.
The Fed, in one of the most disgusting displays of avarice in its history, has used the envy of the sheeple, i.e., democracy and open borders, to support its evil gains by sharing the largesse of the savers' income in give-away loans to the sheeple. It’s called transfer of wealth, i.e., socialism.
Bionic Mosquito wrote: “Envy is the root, the seed that gives life to the tyranny of the majority. Democracy satisfies this covetous nature while sanitizing the evil – creating a false legitimacy to the end result of envy, that being theft and destruction.”
Continuing in The Terrible Tyranny of the Majority, he wrote:
“Because it is determined by majority, this makes it appropriate? It seems at least one authority thinks not:
“Exodus 20:17: You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.
“Recently, Ron Paul identified the issue of envy as one of the two key human emotions that must be overcome if we are to have any sense of liberty and peace on this earth:
‘To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is "envy" which leads to hate and class warfare.’
? Ron Paul”
Here, below, posted yesterday by polo007 is how the Fed substitutes its policies for a legitimate free enterprise market:
According to the Federal Reserve Bank of San Francisco:
http://www.frbsf.org/economic-research/publications/economic-letter/2014/september/assessing-expectations-monetary-policy/
Assessing Expectations of Monetary Policy
An ongoing concern has been that the public might misconstrue the Fed’s forward guidance about future monetary policy and underappreciate the extent to which short-term interest rates may vary with future news about the economy. Evidence based on surveys, market expectations, and model estimates show that the public seems to expect a more accommodative policy than Federal Open Market Committee participants. The public also may be less uncertain about these forecasts than policymakers.
Recently, subdued levels of volatility in financial markets have received some attention. For example, Federal Reserve Chair Janet Yellen (2014) noted that “indicators of expected volatility in some asset markets have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward.” Prices of financial assets, such as stocks and bonds, are sensitive to unexpected changes in interest rates because their present values are determined by discounting future cash flows. Thus, the low volatility in asset markets could, in part, reflect market participants’ relative certainty about the future course of interest rates.
In this Letter, we assess the private sector’s views about future monetary policy in terms of both expected levels of the short-term interest rate and the uncertainty or disagreement in those expectations. Through its “forward guidance,” the Federal Reserve’s policymaking body, the Federal Open Market Committee (FOMC), provides an indication to the public about the stance of monetary policy expected to prevail in the future. Furthermore, since 2012, the FOMC participants’ projections of the appropriate target for the federal funds rate over the next several years and in the longer run have been included as part of their quarterly economic projections, which are released to the public. Research has shown that this communication of interest rate projections can better align the public’s and the central bank’s expectations, which could lead to improved macroeconomic performance (see, for example, Rudebusch and Williams 2008). However, an important concern is that the public might not give enough weight to how dependent the central bank’s guidance is on both current and incoming data. Thus, the public could underestimate the conditionality and uncertainty of interest rate projections.
We assess the public’s expectations about future monetary policy from three sources: (1) surveys of economic forecasters and primary dealers, (2) market prices of federal funds and Eurodollar futures, and (3) estimates from a financial-econometric model. We then compare these public expectations with the expectations reported in the June FOMC participants’ federal funds rate projections (Board of Governors 2014). Our analysis shows that, on balance, the public seems to expect more accommodative policy than FOMC participants. One measure of uncertainty also shows the range of the public’s forecasts is somewhat smaller than that among FOMC participants, suggesting the public also may be less uncertain about their projections.
Surveys of economic forecasters and primary dealers
We look at two surveys of private-sector professionals about their monetary policy outlook. One is the monthly Blue Chip Financial Forecast, based on a survey of about 50 professional economic forecasters on key financial variables, including the federal funds rate, up to five quarters in the future. For our analysis, we use the August 2014 Blue Chip forecast based on polling from July 23–24. The other is the Survey of Primary Dealers regularly collected by the Federal Reserve Bank of New York before each scheduled FOMC meeting. In the most recent survey dated July 21, 2014, 22 primary dealers—brokers or financial institutions that are able to purchase Treasury securities directly from the Fed—submitted forecasts of the target federal funds rate for the fourth quarter of 2014 through the first half of 2018, as well as their expected long-run value.
Figure 1 shows the expectations for the future federal funds rate from the two surveys, and the June FOMC participants’ funds rate projections, collected in the Summary of Economic Projections (SEP). The Blue Chip median forecast of the federal funds rate at a quarterly average of 0.80% in the fourth quarter of 2015 appears to be consistent with the median SEP projection of 1% at the end of 2015. The primary dealers’ median forecast of the most likely date for the first funds rate hike was the third quarter of 2015. Note that their median forecast for the end of 2015 and the end of 2016 were 0.75% and 2.13%, respectively. These median forecasts are lower than the median SEP projection of 1% at the end of 2015 and 2.5% at the end of 2016.
In addition to the median forecasts, Figure 1 also shows the 25th and 75th percentile forecasts from primary dealers and FOMC participants. For a certain date in the forecast, the 25th percentile is the point at which one-quarter of the respondents believe the fed funds rate will be lower, and the 75th percentile is the point at which one-quarter of the respondents believe it will be higher. The distance between the 25th and 75th percentiles measures the forecast dispersion, an indicator of uncertainty or disagreement among the forecasters. In the July survey, the dispersion of the primary dealers’ forecast was smaller than that of the SEP projection. This suggests that FOMC participants were more uncertain about the future course of monetary policy than primary dealers were.
http://www.zerohedge.com/news/2014-09-09/why-stock-market-will-never-go-do
God help us.
Along with leadership comes responsibility, which starts at the top, without it, you are in no position to ask or expect the bottom to tow the line.....
By the way, a powerful article, in a silver bullet nutshell. Thanks!
What are the sheeple supposed to be envious of?
Someone else's wealth.
Critical and sincere thinkers such as Frederic Bastiat have equated socialism with plunder in that a central authority decides what private property is to be taken to transfer to others. Interest rates below the inflation rate, i.e., printing of the medium of exchange beyond 2% of increased production, is plunder.
People exchange their work for money; money saved is stored labor. To deplete that labor with below-inflation interest rates, i.e., off the market rates, is to redistriute that earned wealth to those who did not earn it.
And a portion of the current economy, welfare and employment for many people, has depended on transfer of savers' money to stimulus buyers. So how does that work out? The stimulus spenders are spending savers' income. The chains, the supermarkets, and the government as an employer, all depend on this transfer of someone else's labor to be used by the bankers. That's our new normal until it isn't.
It's obvious, at least where I live, that the people on stimulus income are eating out and lliving it up and the savers on stored value income are eating at home, grounded.
We need to revolt.
Substitute "greed" in there. Makes more sense.
If people are "getting theirs" they care little about anything else.
"[during the run on the bank] You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house...right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others. Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?...Now wait...now listen...now listen to me. I beg of you not to do this thing. If Potter gets hold of this Building and Loan there'll never be another decent house built in this town. He's already got charge of the bank. He's got the bus line. He's got the department stores. And now he's after us. Why? Well, it's very simple. Because we're cutting in on his business, that's why. And because he wants to keep you living in his slums and paying the kind of rent he decides. Joe, you lived in one of those Potter houses, didn't you? Well, have you forgotten? Have you forgotten what he charged you for that broken-down shack? Here, Ed. You know, you remember last year when things weren't going so well, and you couldn't make your payments? You didn't lose your house, did you? Do you think Potter would have let you keep it? Can't you understand what's happening here? Don't you see what's happening? Potter isn't selling. Potter's buying! And why? Because we're panicky and he's not. That's why. He's picking up some bargains. Now, we can get through this thing all right. We've got to stick together, though. We've got to have faith in each other."
Jimmy Stewart was not only a great actor, but a well deserved USAF General. Wish he were President, hell, I wish anyone other than the current occupant were!
Echo, echo.... Stewart represented the best of us, both on screen and off. How I wish that more could stand the test of time as well as he.
Bruno de Landevoisin, here's Dr Albert Bartlett to explain in short words with few syllables why 5% compounded cannot last indefinitely:
http://www.youtube.com/watch?v=u5iFESMAU58
"The greatest shortcoming of the human race is our inability to understand the exponential function." Dr Albert Bartlett
Not seen this before. Definately the best vid I've seen on compunding interest.
Makes me realize we're getting pretty far to the right on the hockey stick graph per the value (or lack thereof) of the USD/FRN.
Thanks, I've seen that. This is obviously directed at scoundrels not intellectuals........;-)
Wow, thanks for taking the time to reply. It is much appreciated. However, the somewhat hidden subtelty in the title is that most people would believe (anyone paying into a pension for example) that 5% compounded interest (exponential growth) can and indeed should continue indefinitely "because we're worth it". Sadly, maths has another view of that story.
DR
In my view, money should always have a fundamentally intrinsice time value to it. After all, it is supposed to represent work having been done, and that always has a time value associated with it.
Not only time but risk as well and in the current environment, the risk is high both from the poor condition of the banking system, the changes in the depositor/institution relationship, and lastly, inflation. Thus, perhaps banks should pay a lot more than 5%.
This is strictly buisness not personal
Al Pacino the Godfather
Badabing to the head
Is dis da news?
"A flame thrower should be taken to the avaricious financial sector..............."
Just now figuring this out? a functioning market serves to provide a mechanism for price discovery so that capital and savings can find productive investments and avoid risk, not serve to rape the productive class and enrich the middlemen who do nothing but push paper fucking promises around.
Let me be clear; roll the motherfucking guillotines, nothing changes otherwise.
He decided -
0.23:
"I've abandoned free market principles to save the free market system" - George W. Bushhttps://www.youtube.com/watch?v=Tmi8cJG0BJo