The Central Banks' Assault On Savers
From Bill Buckler's Privateer:
The Assault On Savers
The best and most basic proof that NO central bank anywhere has the best interests of the actual producing economy of their nation as their focus is the assault on savers and saving. Sustainable economic "growth" is only possible in a situation where more is being produced than is being consumed. This "surplus" is savings which are in turn the life blood of production. When savings are discouraged to the extent they have been over the course of the GFC, one can be sure that the goal of those in charge is not a REAL recovery.
In the UK, Bank of England governor Mervyn King has been apologising to British savers for years over the "necessity" to hold interest rates at non-existent levels. Apologies are all that has been forthcoming. In 2007, savings on call in UK banks attracted an already low average rate of 3.15 percent. The average rate since early 2008 has been 0.94 percent. Since the Bank of England reduced its rates to their present 0.50 percent in late 2008, that average rate has been much lower. According to a recent article in the UK Telegraph, these rates have reduced the interest on savings by at least 70 percent since 2007. This, according to the article, has been done - "to protect an enfeebled economy from outright collapse". What it has done instead is to bring about an all but outright collapse among those who took the definition of the word "economy" seriously. It has impoverished UK savers, especially those on fixed incomes.
The situation is similar everywhere. In the US, anyone who has chosen to live within his or her means over the past four years has paid a heavy price. As is the case everywhere else, the Fed gets things precisely backwards. Their contention is that borrowing is essential for economic "health". In reality, the ability to borrow is the RESULT of the economic health displayed by those who have savings to lend. But what the Fed and the other central banks want to "save" is not the economy, it is the financial system and the imaginary prices of financial assets which form its only foundation.