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Edited on Thu Apr-22-04 07:52 PM by rapier
While long rates have shot up in the last month those rates have not filtered thru to the consumer except in mortgages, where the rate is directly and instantly related to the long bond.
Best Buy and the local furniture superstore, etc. etc. etc is still offering no interest for one year deals.
Simple pass book savings are based upon very short term interest rates and they have hardly budged. Those are the rates which the Fed has a lot of control over. The likelyhood of them rising much any time soon is zero. The Fed HAS to keep short rates low, and will. There is NO alternative. Among other things they certainly want to deter savings.
"What", you say. The Fed wants to discourage savings? Of course. That is the root of Greenspans and the governments and most of all Wall Streets agenda. The ultra low interest rate policy has as its FIRST goal to discourage savings. In fact to punnish savers so that they are FORCED to speculate in stocks and other assets. This is the ROOT of Greenspans policy.
But is not saving the prudent thing for citizens to do? Are not savings the pool from which loans are made. Not any more people. Saving is bad bad bad. It is now an evil we can ill afford. Better to borrow to the max and buy stocks and real estate which is guaranteed to inflate to get rich.
Is Adam Smith spinning in his grave? Are the old fashioned bedrock conservative Republicans of the last 100 years spinning in their graves? No, the dead don't spin.
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