The founder and chairman of the company that bears his name, Charles Schwab, wrote an opinion column 9 days ago that still resonates: he gets it. The it being the cost of the ongoing bailout of Wall Street by Mr. and Mrs. American Middle Class. With interest rates at historic lows and banks and investment companies paying near zero on deposit savings account, certain Americans are paying a high price for the government's position on the rescue of Wall St. banks and investment companies.
Since 2008, seniors 65-74 years old, have lost $1,900/year in income over 6 years according to the McKinsey Global Institute report. For seniors 75 years or older, they have lost $7,500 annually since 2008. In total, seniors have lost $58 billions annually since 2008. WE are talking of families and households that are retired, living on accumulated savings, social security, and maybe a pension of some kind. This group makes up about 13.3% of the population in the country. In other words, we have 13.3% of the population losing billions in annual income while at the same time dealing with a professed government policy of maintaining an annual inflation rate of 2%. So they get stabbed twice by Fed Policy and Government fiscal policy of "controlled " inflation.
Mr. Schwab's article heralded the FED's professed intent to raise interest rates soon, and return monetary policy to the former normal when a 1 year annual CD paid 6.5% interest. Remember those days? The good, old days?
Hmmmmm? Seems like forever ago. Mr. Schwab also noted that investors often look at current returns available and move funds into higher risk instruments, e.g. stocks and equity instruments. Is that a place for a retiree's money that will be safe? Hardly, despite record setting territory of late.
It's about time somebody put the real numbers in front of everybody to shine some more light on those sad souls who have funded the "REAL" bailout: the bailout of the big banks and their shareholders. Shame on the FED and all its members.
No comments:
Post a Comment