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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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60 Minutes' Ben Bernanke Interview - Update

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The 60 Minutes interview of Bernanke was aired tonight. Just like the last 60 Minutes interview in March 2009, there was no question about the negative effects of the ultra low interest rate policy on retirees and savers.

When Scott Pelley of 60 Minutes asked about what caused the Fed to start the purchasing of $600 billion in Treasury securities, also known as Quantitative Easing 2 (QE2), Bernanke gave the following reasons:

It has to do with two aspects. The first is unemployment. The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we're getting awfully close to the range where prices would actually start falling.

At the start of the interview, Bernanke had the following to say about unemployment:

At the rate we're going, it could be four, five years before we are back to a more normal unemployment rate. Somewhere in the vicinity of say five or six percent.

That could mean the ultra low interest rate policy could last for many years.

Scott Pelley asked about the risk of inflation. Bernanke said he thinks this fear is "way overstated". He said the Fed isn't printing money, and the "money supply is not changing in any significant way." According to Bernanke:

What we're doing is lowing interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that's what we're gonna do.

Our best hope for higher deposit rates is a growing economy with declining unemployment, and hopefully, Bernanke and the Fed will be able to unwind this ultra low interest rate policy fast enough so inflation doesn't get out of control. What's worrisome is a condition in which inflation is rising while interest rates stay low. And it becomes more worrisome when it always seem like inflation that retirees and savers see is higher than what is measured by the government.


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18 comments.
Comment #1 by Michael Hunt (anonymous) posted on
Michael Hunt
Bernanke is a fraud. We've had rock-bottom bank interest rates for over 2 years, yet bank lending hasn't picked up. Mortgage rates hit all-time lows recently, yet the housing market remains broken. The Fed is completely impotent and should be dismantled.

23
Comment #2 by Ross (anonymous) posted on
Ross
Our elected officials have sold this country out to the central banks. Maybe the people will wake up and take control of our country. The Fed needs to be shut dorm. The QE1, QE2, (and future QEs) are just bailing out the banking elite at our expense. Befoe they ask us to take cuts... They need to cut the gov. spending.

13
Comment #3 by starlight posted on
starlight
puppets in the hands of the unscrupulous greedy!

12
Comment #4 by Anonymous posted on
Anonymous
To bad Argentina's and Zimbabwe's leaders didn't think of Quantitative Easing instead of running their printing presses overtime...      

4
Comment #5 by Timothy Tolstoy (anonymous) posted on
Timothy Tolstoy
Bernanke is a liar, an incompetent and is corrupt.  He changes his tune with the wind, as he needs to, in order to justify his actions.  In truth, QE-1, QE-Lite and QE-2 have nothing to do with unemployment.  It is all about siphoning money to the people who pushed for him to take power as Fed Chairman, namely the large investment banks who are members of the international banking mafia syndicate.

An illustration of his corrupt and lying nature can be found in the new 60 Minutes broadcast.  In it, he denies that quantitative easing means printing money.  Yet, in March 2009, in his previous 60 Minutes interview, he admitted that by buying $1.75 trillion worth of a combination of treasury bonds and mortgage backed securities, "we are basically printing money."  Look at the two transcripts, and you will see the inconsistency.

The only answer to the intense corruption that has overtaken the American Politburo (aka Federal Reserve) is to close it down for good.  In the meantime, buy silver!  Its soaring even as the bandits at the banking mafia are pumping up the dollar temporarily in order to sell worthless treasury bonds tomorrow.

12
Comment #6 by Timothy Tolstoy (anonymous) posted on
Timothy Tolstoy
I almost forgot to mention the other huge example of Bernanke corruption was when he blackmailed the former CEO of Bank of America into accepting what would eventually turn out to be deep losses by threatening to use the Federal Reserve's regulatory power to remove both the CEO and the Board of Directors if they didn't do what they were told.  Thus, Bank of America, first lied to by a member of the international investment bank lobby about its financial condition (Merrill Lynch), was forced to follow through on a transaction that saddled it with hundreds of billions worth of defective mortgage securities it must now buy back from investors who were duped by the mortgage backed bond securitizer Merrill Lynch.

5
Comment #7 by Timothy Tolstoy (anonymous) posted on
Timothy Tolstoy
Bottom line, take your money OUT of American banks and out of the U.S. dollar before it is too late.  If you don't, the banking mafia will take it out anyway by debasing it down to zero value.  Stay in the U.S. dollar, and you are going to be a pawn in a very corrupt debasement game, played by the banking mafia through their pawn, Ben Bernanke, and his band of fools.  Forget fiat paper money!  If you had bought silver, back in August, at 17.50 per ounce, you'd have an interest rate of more than 110% annualized.  That beats the hell out of the rates offered by any bank or credit union, and you will be converting worthless paper fiat money into real money that they cannot debase permanently.  Yes, they can manipulate silver, and CFTC Board Member Bart Chilton has gone on record as saying that certain members of the international banking mafia (J.P. Morgan Chase & HSBC) have been nefariously influencing the price.  But, now, that the cat is out of the bag, the market is going to destroy the manipulating short sellers, and drive prices to $75 per ounce before the price stabilizes. 

DISCLAIMER:  I put my money where my mouth is, and am long on silver!

1
Comment #8 by Anonymous posted on
Anonymous
ON THAT NOTE IF YOU LOOK A GOLD AND WHAT IS REALLY GOING ON IN THE WORLD YOU WILL SEE THAT CHINA IS BUYING UP THE GOLDEN STUFF NOT OUR DOLLERS...AND REMEMBER THE GOLDEN RULE..HE WHO HAS THE GOLD ,MAKES THE RULE ..ITS TO LATE FOR ME BUT YOU BETTER LEARN HOW TO SPEAK CHINESE.....

2
Comment #9 by SaveYurMoney posted on
SaveYurMoney
Bernanke won't admit it but the ultra-low interest rates are like a backdoor tax on people who save money.  In this case instead of getting 5% interest/year and then paying tax on about 25% of it, we only earn 1% to start with! So instead, a lot of money is flowing into the stock market and commodities so people can get some kind of return - but this is creating new bubbles.

 

6
Comment #10 by Tod Miller (anonymous) posted on
Tod Miller
So what does this means...will the mortgage rates go up in the coming weeks. I am closing a house deal next week and waiting for the mortgage rates to go lower than last week. Today it's 4.6%. Can anyone here give me any advice on the mortgage rates.

1
Comment #11 by Anonymous posted on
Anonymous
My 2 year CD just matured.  Rate went from 4.51% down to 0.64% for the renewal term.  No way I am going to renew for that rate.  I guess I should have gone for the six year term instead.  At least I got a muni bond at 5% that is good for another 10 years.

2
Comment #13 by Anonymous posted on
Anonymous
Bernanke is a danger to himself and to others.  But he has performed a miracle:  He's so bad he actually had made Greenspan look good.

Bearded Ben is obviously leading us into a long period of stagflation, perhaps the worst possible outcome for savers.  I can live with 0.5% interest rates when deflation is rampant.  It's the best of all possible worlds because my tax is so low.  Deflation allows us savers to earn high returns without having to pay income tax.  But deflation is what Ben is fighting.  Thanks, Ben.  You're a mensch.

1
Comment #14 by Anonymous posted on
Anonymous
The recession is 3-years old and going strong, the unemployment rate is increasing and "Shylock the bank moneylender" Bernanke has spent over $3.3T taxpayer dollars with his FAILED monetary policy.

It FAILED to help foster the US economic recovery and reduce unemployment. Bernanke SUCCEDED in refloating his beloved Banks and Wall Street into hugh profits once again. That had to be Bernanke's and Obama's plan from the start!

I'm an unemployed victim of this bank induced recession and finding it harder and harder to generate enough fixed income (deposits, bond funds / ETF's) to make ends meet. That's thanks to Bernanke's 0% Fed Fund Rate which the Banks have been are using to flip Treasuries and play the stock market ... instead of lending. Corporations are taking Bernanke's bailouts, hoarding capital and still not hiring.

Bernanke's spin on deflation is to continue justifying his monetary policy. It's really INFLATION ... everone's cost of living is increasing due to higher property taxes, utilities, services, insurance, food, fuel and probably 2010 income taxes!

As long as we got a Federal Reserve, there will always be corruption, recessions and Bernanke types.   

   

3
Comment #15 by Purplesage posted on
Purplesage
Don't waste your time posting a comment to this site. Ken will probably delete it if you don't pass his muster.

1
Comment #17 by Anonymous posted on
Anonymous
Bernnanke is a puppet of Obama's and Pelosi-----No one person should have this much power to manipulate our finances and market place---the Republicans will end this craziness of his in the next 2 years and by end of 2013--int. rates hould be about 4% on 5 yr CDs again--look at the T Notes for 1o and 20 and 30 yrs--they have begun to climb alot------it is only   a matter of time--things will revert back to where they naturally should be----Congress will not let this go on

1
Comment #18 by Anonymous posted on
Anonymous
#17: I don't think you realize why Berneke has so much power. It has nothing to do with Obama or Pelosi, or any political party. The Fed exists to keep the banks rich, and can not be stopped by the Republican house (lol). Seriously, we're all ****ed no mattter who is in power

2
Comment #19 by Anonymous posted on
Anonymous
HAY PURPLE SAGE DONT GO AWAY MAD JUST GO AWAY AND take timmy the toy w u

1