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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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FOMC Statement: Exceptionally Low Rates At Least Through Late 2014

POSTED ON BY

I'm afraid the Fed has pushed out its low-rate pledge from mid 2013 to late 2014. Here's an excerpt from today's FOMC policy statement:

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

In its statement the Fed admitted that "the economy has been expanding moderately", but it still felt it necessary to to extend out its low-rate pledge by a year and a half.

New regional Fed presidents are voting members this year, and only one appears to be an inflation hawk. Jeffrey M. Lacker, the Federal Reserve Bank President of Richmond, voted against the action. According to the FOMC statement he "preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate."

When the Fed came out with its mid-2013 pledge last August, it wasn't good for deposit rates. Savings account and CD rates went down quite a bit in the months after the announcement. So if you had been thinking about CDs, it would probably be better to act sooner rather than later. If you're trying to decide how long to go and the importance of early withdrawal penalties, you might want to review the following two posts:

The new FOMC forecast of the federal funds rate is scheduled to be released soon. This won't be that interesting now that we have this late-2014 pledge. Also, Bernanke will be holding a press briefing starting at 2:15pm ET. It'll be interesting to see how Bernanke justifies the late-2014 pledge.

Update 3:50pm: Bernanke's Press Briefing In Bernanke's press briefing, he once again acknowledged the negative effects that low interest rates had on savers. However, he basically said that the health of the economy is a higher priority. His exact words were "The savers in our economy are dependent on a healthy economy in order to get adequate returns."

In terms of the late 2014 pledge, he implied that this isn't written in stone. However, the Fed will probably have to see dramatic improvements in the economy before they would pull in expectations of higher rates.

The Fed also released its economic projections and the new fed funds rate forecasts. This Calculated Risk Blog post has a good review of these projections.

Future FOMC Meetings

The next two FOMC meetings are scheduled for March 13 and April 24-25.



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Comments
71 Comments.
Comment #1 by Anonymous posted on
Anonymous
It is a pity that I am paying with my hard earned savings to re-elect obama and bernecke.

11
Comment #2 by scottj posted on
scottj
While it does not seem good I don't put all that much into it. They wording of "likely" means anything could happen down the road to change things. 

4
Comment #3 by Shorebreak posted on
Shorebreak
This continued punishment of savers with near zero yields on their deposit products is nothing but the ongoing transfer of wealth to Wall Street by Bernanke's Federal Reserve. Seniors on fixed-incomes have no other way to keep up with inflation other than place their hard earned funds at the mercy of the traders in the great stock market casino. I'm wondering when the hedge funds, JPMorgan, Goldman Sachs, et al will pull the rug out from the market once again and destroy the financial well being of millions more of our citizens. I'm afraid presidential candidate Ron Paul is right on one of his campaign points..."get rid of the Federal Reserve".

25
Comment #4 by me1004 posted on
me1004
For four years now, Bernanke's unbearably low rates have not improved the economy. None of his announcements that rates will remain low have served to get anyone to invest. Time to rethink, Bernanke! All you have done is take away all income from a large block of the public who depends on it for their income, like the retired and others -- thus undermining the economy by cutting off spending by those people even as that has been shown to do nothing to spur spending by others or business buildup.

Endlessly strangling savers until the economy comes back DESPITE the Fed's horribly low rates is not a good or sensible plan. And I haven't even gotten to talking about fair. Try announcing that rates will be going up soon -- so better grab loans now and make those investments now. That might get something moving. Telling them not to bother to take a loan and invest now because rates are going to be this low for at least two more years so take your time is not going to get any one to jump out and invest in more jobs! That is as illogical as can be.

27
Comment #5 by Anonymous posted on
Anonymous
I noticed that in their long range forecast statement, the Fed is expanding its mandate even further.  They referenced the dual mandate of full emplyment and stable prices.  Then, they went on to include "moderate long term interest rates" as part of their mandate.  When, specifically, were they given this mandate?  Or did they simply create it on their own? I guess the next step will be for the Fed to set the rate of interest rates along the enire yield curve rather than let the financial markets determine the shape of the yield curve.

IMO, the Fed should have one and only one mandate: Price Stability.  That means exactly what it says: a target inflation rate of zero; not two percent.  If you have worked hard and scrimped and saved some money, do you really think the government should reduce the value of your savings by two percent every year?  I sure don't.

11
Comment #6 by Shorebreak posted on
Shorebreak
Is the U.S. economy heading for a Japan-style lost decade?

http://onpoint.wbur.org/2011/09/27/a-lost-decade

9
Comment #7 by randy (anonymous) posted on
randy
WHY ARE WE ALLOWING BERNANKE AND HIS POLICIES TO PREVAIL WITHOUT A FIGHT?  THERE ARE SOME 50 MILLION RETIREES IN THIS COUNTRY ON FIXED INCOME AND ALL WE DO IS WRING OUR HANDS AND MOAN, YET WALK AWAY WITH OUR TAIL TUCKED BETWEEN OUR LEGS.  WE HAVE BECOME THE SACRIFICIAL LAMBS FOR THE FINANCIAL ILLS OF THE ENTIRE COUNTRY.  WHO IS STANDING UP FOR US?  WHERE IS THE OUTRAGE?  WHY ARE THERE NO VOICES TO DEMAND THAT THE POLICY MAKERS STOP DESTROYING THE ULTIMATE AMERICAN DREAM--TO BE ABLE TO RETIRE WITH DIGNITY AND SECURITY?  THERE WAS A TIME IF YOU WORKED HARD, PLANNED AHEAD, SAVED YOUR MONEY AND BUILT A NEST EGG; YOU COULD LIVE OUT YOUR TWILIGHT YEARS IN COMFORT, WITHOUT TAKING RISKS IN THE MARKET, JUST ON SS AND THE INCOME FROM A 4 OR 5 PERCENT RETURN ON CD'S.  THAT IS NO LONGER POSSIBLE FOR THE VAST MAJORITY AS WE WATCH A LIFETIME OF EARNINGS BEING EATEN UP BY THE SKYROCKETING COST OF LIVING, HEALTH INSURANCE PREMIUMS (6O% OF MY SS CHECK), PROPERTY TAXES, AND HOME AND AUTO INSURANCE--ALL ON VIRTUALLY NO RETURN ON PRINCIPLE.  YET, GIVE US BACK A LIVABLE RETURN ON OUR MONEY, AND I GUARANTEE YOU WE ARE THE ONES WHO WILL GO OUT AND SPEND, SPEND--THUS STIMULATING THE ECONOMY INSTEAD OF RELYING ON CORPORATE EXPANSION AND THOSE WHO SHOULDN'T BE BUYING HOMES EVEN AT RECORD LOW RATES!  I AM NOT TECH SAVY ENOUGH TO ORGANIZE, BUT I SURE WOULD LOVE TO SEE OUR BANK GUY KEN OR THE AARP OR SOMEONE TO START AN ONLINE ACTION GROUP THAT CAN CREATE A FOLLOWING AND BECOME A POLITICAL FORCE TO PETITION AND VOICE THE CONCERNS OF AMERICA'S FORGOTTEN COMMUNITY!

18
Comment #8 by Allen (anonymous) posted on
Allen
I keep saying that those 7 or 10-yr CD's, at 2.50% or more when available, are the way to go right now.  I really have that opinion now.  The 5-year or shorter CDs will be sub-2% soon and stay that way for quite some time.  Forget about the EWP's -- if you can get a 2% rate or better you will not want to take an early withdrawal.

9
Comment #11 by Anonymous posted on
Anonymous
Randy please quit SHOUTING!

12
Comment #12 by RANDY (anonymous) posted on
RANDY
#11, IF YOU DON'T LIKE IT OR HAVE SOMETHING CONSTRUCTIVE TO OFFER, GO SOMEWHERE ELSE.  I AM MADDER THAN HELL AT THE FEDERAL RESERVE AND DON'T WANT TO TAKE IT ANY MORE.  WHY ARE YOU TAKING MY CAPITAL LETTERS SO PERSONAL?

11
Comment #13 by me1004 posted on
me1004
I say we draft Randy for president! He'll fight for us.

11
Comment #14 by Janet Lynn (anonymous) posted on
Janet Lynn
Me thinks Randy is a ****.  Everyone knows that using capital letters like that is just plain rude.

8
Comment #16 by Shorebreak posted on
Shorebreak
Randy; I don't think AARP is going to help much since they are too inviolved with promoting insurance, annuities and other investment vehicles to their members. I would rather ask the question would 50 million, or even 25 million, signatures on a petition make a politician think about supporting a cause? Using http://www.ipetitions.com/ or other similar sites one can easily create their own online petition activism movement.

8
Comment #17 by randy (anonymous) posted on
randy
Shorebreak, good point!  I appreciate the reply.  I will check out the link you posted.

5
Comment #18 by Anonymous posted on
Anonymous
“Insanity is doing the same thing, over and over again, but expecting different results.”
    - Albert Einstein

10
Comment #19 by Shorebreak posted on
Shorebreak
Here's a nice summation of the damage Bernanke's Federal Reserve is doing:

http://globaleconomicanalysis.blogspot.com/2011/01/hello-ben-bernanke-meet-stephanie.html

3
Comment #20 by Hal (GT) (anonymous) posted on
Hal (GT)
What was the most interesting thing to me was how the precious metals commodities reacted to the news. While working in the office I kept the Exact Price widget running so I could watch the day unfold and the precious metals looked parabolic. It was something to behold.

Though this kind of move typically will mean a pull back to retest lows in the next couple of days. It is interesting to get this kind of news which in some ways goes counter to the Administrations take that the economy is improving. Leaves me a bit confused. But than that seems to be the market norm.

1
Comment #21 by Anonymous posted on
Anonymous
The metals moved higher because low/lower interest rates suggests 1) more money to spend, 2) diminished value of currencies, 3) greater likelihood of inflation.  People who invest exclusively in savings accounts and CDs might want to consider alternatives. 

3
Comment #22 by Anonymous posted on
Anonymous
WHAT IS AMAZING TO ME IS THAT,KEN GOES OUT OF HIS WAY TO POST LATEST NEWS ABOUT ECONOMY AND BANKING SECTORS WHILE SOME OF YOU FOLKS RANT AND RAVE ABOUT BS THAT HAS NOTHING TO DO OR RELATING TO THE TOPIC ON HAND... #9-#15 IN PERTICULAR....AND AS FAR AS CAP LOCKS I LEAVE MINE ON ALL THE TIME...!!!!!

3
Comment #23 by Elayne (anonymous) posted on
Elayne
#22 says that he leaves his cap locks on all the time -- he's probably the guy who wears a belt with his suspenders and has a propeller on his beanie cap.

5
Comment #24 by Anonymous posted on
Anonymous
And YOU, #23, are perchance his spouse? 

2
Comment #25 by Anonymous posted on
Anonymous
I just finished helping with a letter writing campaign to Obama concerning Cancer Research.  The White House has a place for Petitions and I tried to put one on complaining about the exact problem Randy is upset about.  However, if you don't get a certain number of signatures in I think a month, they discard your petition.  I AGREE with Randy!!  We seem to have enough people on here to make our anger known to Washington but although I have sent many of my own letters to that "circus" we call our senators, Obama, and Bernanke, they disregard them.  ONE letter is easy to disregard because that is just ONE vote to them but if we had hundreds of letters or signatures on a Petition about this low interest rate problem destroying our savings, they just may take us seriously!  Now Bernanke is saying "low interest rates until 2014".  We should be so lucky that they even raise them then!

I think Ken has his hands full with handling this forum but he must have people like that lady who writes all those articles who could put together a Petition or Letter Writing campaign for us.  People, we can't stick our heads in the sand and let them get away with this without at least putting up a fight!! 

Randy, your caps don't bother me because I can feel your anger.  I just wish others will get angry enough to come out and be willing to join into a group which will flood Washington with letters or even emails to their own Senators about this.  We gripe to each other but we need to put that energy to good use! 

KEN:  You know better than anyone how these low rates are destroying our savings and our lives as we hoped they would be.  I  am trying to help my relative who lost her job and these low rates are drowning me!  I WILL BE SO HAPPY TO JOIN ANY GROUP WHO IS WILLING TO PUT TOGETHER A CAMPAIGN TO FLOOD WASHINGTON WITH LETTERS OR EMAILS.  However, we need a leader who is willing to help us do it right!  If it can't be Ken, then, I do hope he cares enough to help us find this person who can help us.  And please don't say it won't help!  THIS IS AN ELECTION YEAR!  If we don't do it now we will lose a lot of our power.  

My heartfelt thanks to anyone who is willing to put their anger about this issue into words!   

10
Comment #26 by Shorebreak posted on
Shorebreak
I have written letters to all the politicians who say they represent their constituents (me) in my state, and district, to no avail. I have written to the Federal Reserve Board of Governors, Chairman Bernanke and even President Obama, also to no avail. It's fairly obvious they are all in the pockets of the big money interests, which includes the financial institutions, so they are not the least bit interested in what we have have to say regarding the punishment inflicted on savers by Bernanke's Federal Reserve. I don't know what really would bring about any reversal in this terrible policy of near zero interest rates through 2014 that remains in place. I'm willing to help try anything, within reason, to change their minds. Go for it Randy, Ken #25 and everyone else, I'm with you.

5
Comment #27 by Anonymous posted on
Anonymous
bring back the jimmy carter rates

5
Comment #28 by Anonymous posted on
Anonymous
That 10 year PENFed CD a while ago at 5% looks so good now.  Wish I had put in some more in

6
Comment #29 by Anonymous posted on
Anonymous
Shorebreak:  That's what we need!  More people who will just say they are willing either sign a Petition or send letters on the same dates.  It is good to know you already sent letters like I did to all the same people but what they need is to be blasted with either emails or letters coming from an entire group of people with the same message!  I saw a couple of Petition webpages which seemed to get notice.  I prefere using the Petition on the White House webpage but it would fail unless we knew we had enough people willing to sign it.  I do hope more of you will be willing to help.  We can't do this alone!  At least we can say we fought back!

2
Comment #30 by Anonymous/Paoli (anonymous) posted on
Anonymous/Paoli
Shorebreak, Randy, and any others who are willing to get involved with this, let's not allow it to disappear. I checked out that IPetitions page and would love to put a Petition on it as long as we know we have enough others who care on here to sign it.  I was rereading many of your posts about the low interest rates and they have some really good points in them.  What I would love to do is to be able to have someone put together a letter to use as a Petition using many of what has been pointed out on this thread.  If someone would prefere to come up with a completely new letter for the Petition, would you please post it as soon as possible? 

People my fingers are exhausted from writing letters to Washington and  being ignore.  There IS "POWER" in numbers!  I will personally be glad to send letters to Obama, Bernanke, Ron Paul (because I think he may be one who cares!) and my senators and let them know we are putting up a Petition so they will know we are letting the WORLD know how upset the elderly are about what is  being done to them!  Thanks to anyone who will help us.

3
Comment #31 by Anonymous posted on
Anonymous
Be serious, you can get all the people you want you'll change nothing. I wish you could but I'm afraid it is unrealistic. As far as the people that are whining about using capital letters, YOU ARE VERY PETTY!!!!

5
Comment #32 by Anonymous posted on
Anonymous
Randy, yes, we savers need to raise hell.  Using all caps, and not breaking your posts into paragraphs, means that fewer people will read your comments, reducing your impact. All caps reduces readability.

3
Comment #33 by Anony/Paoli (anonymous) posted on
Anony/Paoli
People, my partner just told me that Newt Gingrich has a webpage up where he wants to hear our opinions.    Well I just finished posting mine to him:

We have watched ALL the Republican Debates and find there is a huge hole in the Republican platform.  We have been reading posts from the elderly all over the US who are furious about what Washington has allowed to happen to their savings income by keeping interest rates so low for such a long period.  You want people to spend but you are disregarding a "huge" faction of voters by destroying their savings!  These people worked all their lives to try to save for their "golden years" only to find these are the "black" years and they desperately have to accept 1% on their savings.  Yet no one mentions this travesty on the elderly and the youth who will not be able to get any decent returns on SAFE investments. 
So,  Speaker Gingrich, if you become President,  can we expect HELP in getting these interest rates raised on our savings?  We anxiously await your response.

So people, if we find ways to keep pounding at them about this problem, maybe the candidates for President will decide to do something to get more votes.  Let's use every avenue we can to make them aware how upset we are about this.  BTW, anyone who things what I am doing is not what this group is for I would like to say.  This forum is about how to get the best and highest interest rates and that's all I am trying to do.  Help us try to get higher rates!

4
Comment #34 by Grace Ann (anonymous) posted on
Grace Ann
If anyone will help us savers, Newt will.  Read his platform/position papers.  I took the time ot do so. I never would have supported him except for this issue.  I am a dyed-in-the-wool S. Michigan Democrat, but Go Newt!

2
Comment #35 by EnronLoveChunk posted on
EnronLoveChunk
 From the least of evils I'd rather pick low interest rates, than the econimy collapsing. As far as capital letters on forms that would be like shouting in a conversation. People hear your screams rather than your message.

2
Comment #36 by Anonymous posted on
Anonymous
Under the Federal Reserve Act, a President can only remove a Fed Chairman for "cause," which, in my view, requires a dereliction of duty.  I think Bernanke  created the necessary "cause" today when the Fed, for the first time, explicitly adopted a 2% annual inflation "target."  The Chairman admitted that this target doesn't literally meet the "stable prices" mandate of the Board, so he seems to me to be ignoring his statutory obligations.  President Obama won't do anything.  I hope all the Republican candidates, however, will clearly take the position that Bernanke must go immediately.  He's a scared little man who is afraid his legacy will be tainted by deflation, and accordingly gives himself a 2% margin of error.  Senior citizens and other savers don't have the luxury of a 2% margin of error.  

10
Comment #37 by Parris Boyd (anonymous) posted on
Parris Boyd
I'll be takin' action. I'll be cuttin' back on spendin' and I'll be refusin' to vote. Repukes and Demagogues march to the drumbeat of corporate interests and Wall Street. Elections (assuming they're not rigged to start with) are simply about which filthy rich candidate gets the high payin' job with all the perks. At least I'll be savin' the gas money it would cost to get to the polls.

5
Comment #38 by Anonymous posted on
Anonymous
Bernanke is a crook.  He is stealing from savers and giving to debtors while simultaneously raising the price of non cash assets and degrading the value of money.  We should have a gold base system which existed before the crooks became in charge

11
Comment #39 by Anonymous posted on
Anonymous
obama does not want gienter in his next term i hope he drops bernencke to .both lack common sense

2
Comment #40 by Anonymous posted on
Anonymous
From reading these last posts, I get the feeling, there are very few people in this forum who really care about the low interest rates.  Too bad all that anger energy couldn't have been put to better use.  Guess any Petition would have been a waste of time for the few signatures it would get.  If tomorrow doesn't get a more positive response, I'll just do what I have always done.  Sorry Shorebreak and Randy but the interest with most just seems to be in griping.  Too bad.  No wonder our country is in the shape it is.  Thanks anyway! 

1
Comment #41 by Anonymous posted on
Anonymous
This is just sickening. Why does Bernanke feel it is so important to state that rates will likely not go up for two more years? It's bad enough that they aren't going up, but this statement just allows banks to cut rates even more, the way that they did a few months ago when he said not through 2013. We are literally going to be looking at 1-year CDs at around .50%. I will tell you that First Republic Bank, where I used to be happy to park my deposits a few years ago, actually has a 1-year CD for...  .05%. Yes, that is correct. $100,000 deposited earns you $50 for the year, before taxes. And if the banks can just manage to get you on one single penalty for something or other, they will actually get money from you! Your deposit on withdrawal will be less than you put in. Oh, and of course inflation is about 2%, so every single middle class person who is trying to cope, is losing money every single year.

Bernanke is not a a bad person. But he, as apparently now every President of either party, are all, in one way or another, far more concerned with banks and large corporations than they are with tens of millions of average Americans. Bernanke says that he knows he is hurting savers (that's 100 million people or so), but "he is doing it for the health of the economy." That means, "the health of the banks." And there is this vague idea that the banks, awash in free cash, will make loans to people, enabling them to put on debt, increase the price of homes, and repeat the credit insanity of the last 30 years. Apparently the policymakers believe that the only way to  have the country running is on a debt and credit bubble.

The actual pain faced by retirees, and anyone on a fixed income, has been horrendous, and now will get worse. How are you supposed to support yourself if you cannot work? Do they want people to gamble on the stock market? The race track? Rob banks? (there's an idea). Go to jail, so you get free room and board? Maybe I'm being a bit hyperbolic, but wait until the excellent moderator of this site tells us how the five-year CD rate is down to 1%, and they won't let you take your noney out if you need it earlier. Ahd there is not a **** thing that anyone of us can do about it. There is no candidate representing the working class or the middle class or the retired class. There are candidates of the super-rich, of the rich, and of the banks. And 90% of the Congress is owned by the same entities. So what do you suggest Ben? The ponies, the poker tables, the Patriots?

13
Comment #42 by lou posted on
lou
I support the petition idea, but it is important for everyone to vote for the Republican candidate in Nov, no matter who it is. Obama has appointed 4 members of the FOMC and they are all hard core supporters of the zero interest rate policy. As a matter of fact they are more militant about it than Bernnke. The Vice Chairperson of the Fed, an Obama appointee, has already called for QE3 and an inflation rate higher than 2%. Recently, Obama has nominated two more people to the Board, both advocates of the present policy. Thankfully, the Republicans in the Senate are blocking the confirmation of their appointments.

Bernanke was asked today in the press conference if he would resign if a Republican President asked for his resignation. He refused to answer but didn't say no. Every Republican candidate, including Romney, has already said they would not reappoint Bernanke. So the first thing every senior in the country can do (despite what the AARP says) is to vote for the Republican nominee in Nov.

13
Comment #43 by Sidney (anonymous) posted on
Sidney
Lou #42, I must compliment you on your very wise comments.  I usually try and read your posts, and I agree with 98% of them.  If you ever find yourself in the great state of Minnesota, let me know and I will invite you to sit in on one of my honors Economics classes as an honored guest.  I am 63 years old, born and raised in a Labor Union Democrat household, but will be voting Republican this fall no matter what.  The current fiscal policy is hurting seniors as well as all who are thrifty and saving for their futures, even youngsters and young families.  The university credit union at my college now has a 5 year CD with a rate of 1.83%.  Unheard of, and crazy.  I will be working for many more years because of all this.  Good luck to all in this terrible environment.

 

11
Comment #44 by Anonymous posted on
Anonymous
bernanke is a lost soul,yes lower int rates may help but not zero and not for 7 years bernanke and obama must realize that savers are a big part of this economy and deserve at least 3%  all he cares abt are the losers look at all the 5  $ iphones sold go to the packed rest , look at all the new cars much of this is bot with govt free money by the millions of freeloaders  3 yrs of unemploymeny benefits, i know 10 people on disability and not disabled all this and much more while savors are starving to death no income for5 yrs

6
Comment #45 by Dana (anonymous) posted on
Dana
IMHO take those 2% or higher cd rates that are still available now, even for 10 years, and run with them.  You won't be able to do better for at least three years, and if you go short-term, you'll be sitting with 1% (or less) during that time period and maybe for even longer.  The 3% rates from 2011 look great now, and the 2% rates from NOW will look great in 2013.  I could be wrong but I don't think that I will be.

7
Comment #46 by Anonymous posted on
Anonymous
To Anonymous #7

I, too, am looking for a group to stand up for savers, especially retirees.   I, too, don't want nor have so far entered the stock market casino.   I am fearful of losing principal as has happened in the past whenever I have tried being in the stock market.  I would rather be extremely careful spending -- meaning of course, not going out and buying things I don't need which is what Bernanke is trying to push us into doing.   I have called my senators' offices and representative's offices many times with the same old same old broken record response.   In my opinion, they just don't give a hoot about us.   For the very low income seniors, they can apply for food stamps and heat assistance but the middle class seniors are simply pushed aside without a care in the world about us.   I live in a state where property taxes are out of control.  I would have used the interest I earned on my CDs to pay those property taxes in retirement but, guess what?   The interest is next to nothing, so the taxes have to come directly from savings that have earned next to nothing in interest and will be depleted that much sooner without decent interest earned added to the principal.

So where is the group or organization that will stand up for us?   Anyone who has any ideas as to who might be sympathetic to our cause and also have the power and influence to make a difference should let us all know.  

This blog is about the only place I can let out my frustrations with what's happening.  That is because it is the only place where I can find others who seem to have views and experiences similar to my own.

6
Comment #47 by Kaight posted on
Kaight
I agree only a foolish saver would vote for Obama.  This for the reasons above mentioned and a host of other reasons.

But I have real concern any of the Republicans currently in the running is going to be able to fix this nation's problems.  $16T is a whale of a lot of money . . . more than any of us actually is able to comprehend.  The downslide began during the Bush administration.  And I do believe the combination of Obama and Bernanke might have put us beyond the point of no return.

It was on Drudge yesterday.  About 4000 Americans have already renounced their citizenship and simply left.  I can tell you this:  If Obama is re-elected I might join them.  Like you, I love this country.  But with Obama and Bernanke at the helm, it's not my country any longer.  I could never leave America.  But given what is going on I believe, like thousands of others, it might already have left me.  There is not long to wait.  I will know for sure, one way or the other, in November.

3
Comment #48 by Anonymous posted on
Anonymous
As Lou said in an earlier post, every republican presidential candidate said that they would not re-appoint 'helicopter ben' Bernacke!  So voting out obama is the only way we can get rid of him and stop these ridiculous obama inflation loving, low interest rate federal reserve apppointments.

And like I said in my first post (#1 above), I am sick and tired of obama and bernacke using MY MONEY to pay for keeping THEIR JOB.

5
Comment #49 by Anonymous posted on
Anonymous
Remember, not only are we paying for this mess they created with our lower CD rates but we will continue paying in the future with very high, Jimmy Carter-like inflation, probably 10% or more!!!

3
Comment #50 by Rick (anonymous) posted on
Rick
In  this, as in all aspects of life, the best move is usually to play the hand you're dealt to the best of your ability. When I was lucky enough to be able to take advantage of the PenFed 5% offer last year, I made sure to go All-In on it. As you might guess, I'm a bit of a gambler, so this year, it will probably have to be a stock market play, but, really, there are some decent low risk yields available there. I might not win every play, but I won't be whining, I won't get angry, I won't be tilting at windmills, and I will survive. I might even thrive.

4
Comment #51 by Anonymous posted on
Anonymous
There are NOT 50 million retirees in the U.S. That would be about 1/6 of the total population.

What he may have meant is there are 50 million people age 60 or over (although that sounds high,too.)

2
Comment #52 by Sanchez (anonymous) posted on
Sanchez
If we all vote these bums out of office in Nov., we'll be better off.  Don't they realize that those who are being hurt by low deposit rates also SPEND money?  This has got to hurt the economy as much or more than it helps it.

4
Comment #53 by Shorebreak posted on
Shorebreak
I could not find a petition already in the works but there was an article published when Bernanke proclaimed interest rates would stay low through 2013 that made some excellent points on how this policy is not only hurting savers but also holding back the revival of our economy. Perhaps some of these points could be included as bullets in a petition. Anyway, take a look at it and see what you think.

http://www.iol.co.za/business/business-news/analysis-fed-s-easy-money-hits-savers-fails-to-spur-growth-1.1125406

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Comment #54 by Shorebreak posted on
Shorebreak
Here are Bernanke's financial assets as 2007. Why are not his latest assets available for public view? Perhaps because the Federal Reserve is a private instution. As of now, we do not know if there are conflicts of interest involved in all his decsion making processes.

http://www.opensecrets.org/pfds/CIDsummary.php?CID=N99999968&year=2007

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Comment #55 by Anony/Paoli (anonymous) posted on
Anony/Paoli
Shorebreak:  I just read that article and it makes all the points which need to be addressed, imo.  Does this mean you think we are back in the ballgame for the Petition?  I don't know how you are at putting together Petitions but do you think you could come up with a "shorter" version of that article which you would be willing to write up and post on here for us to see.  I have a feeling what you come up with is going to make a great Petition and once you post it to that IPetitions page and let everyone know it is up, we just might get tons of signatures from our own people and outsiders who are looking for something to sign and voice their anger with.  I would be so thrilled and full of new hope if even others would read that article and come up with their version for a Petition. 

Thank you soooo  much for picking up the ball and running with it on this problem.  My knees are not up to what they once were but I assure you, I will be in this with you as long as I know I won't end up fighting this battle alone! 

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Comment #56 by Anony/Paoli (anonymous) posted on
Anony/Paoli
Shorebreak, Randy and others who are interested:  While waiting for you to come up with your version of a Petition, I read many others and came up with one that could possibly work.  If you want to change it, add or delete anything on it, please feel free to do so.  I would welcome any help and advice.  Thank you.

"SAVERS UNITE AGAINST SUPER LOW INTEREST RATES BY FEDERAL RESERVE"

Superlow interest rates brought on by the Federal Reserve are seriously hurting retirees, other savers, and pension funds.  These superlow rates have not delivered the robust recovery the Fed expected.  Businesses are not expanding and people are afraid to spend even with such low rates.

Superlow interest rates are not stimulating the economy enough to make the destructive financial pain to savers worthwhile.

We, the undersigned, urge and petition the Federal Reserve to raise interest rates immediately to allow retirees and other savers to make worthwhile income on their savings in a safe fashion.  We want to be able to enjoy participating in the economy by being able to spend our interest income from savings we acquired through many years of disciplined and dedicated saving.

We are tired of the Fed ignoring the strong negative effect their policies are having and their sacrificing  savers without good cause.

We are no longer "patient" with the Fed's policy which has not worked inspite of the financial suffering it has caused to savers.  We intend on complaining until it is adjusted to help savers.

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Comment #57 by Anonymous posted on
Anonymous
The real story and the real problem isn't all about the Fed Chairman, the Fed, who wins the next Presidential election, or even "jobs", but more about the income of the average Joe and Jill, whether working, or like me, retired, and getting SPENDING into the economy. From 1999 to 2009, one-third of the manufacturing jobs in the U.S. of A. bit the dust--a total of 6 million jobs biting the dust. Why? Because of decades of what I call the 3 "'shuns":  automa"shun", globaliza"shun" and deregula"shun". A little of one of those 'shuns goes a long way and these babies have made a ****tail with a real kick. kick. With average incomes adjusted for inflation having not gone up for a very long time, even if jobs get added in upcoming years, most of the new jobs aren't going to be producing the income they used to. The Fed's latest "freeze" of a sort on low-interest rates until LATE 2014 is, translated: "Th..h...h..That's All Folks, 'peers the economy's likely to be in the 'loo until almost 2015."

So, even if jobs come back roaringly for a long time--and they're not likely to do just that--the incomes of workers won't be that great and the economy isn't going to see much of a benefit from increased SPENDING. What most people want is a pretty quick fix to the situation and even though greater levels of  SAVINGS would actually in the longer run, be better for the eonomy, the pressure is for a quicker fix than people would see from increased savings. (And, housing is kaput to create a quick fix). An increase in government spending is another matter entirely because of the present level of government debt. Even if the stock market is overpriced now, it's become an easier way for get a quicker fix to create some improvement in the tanked economy. So, it looks as if stock market "high-rollers" may now enjoy playing their game for some time--and at least there is some comfort in the fact that most of those folks aren't likely to wind up all that better off-there may even be an illusion of better times in the near -term because of the illusion created by a higher level of prices in stocks.

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Comment #58 by Anonymous posted on
Anonymous
#57  Does that mean you won't sign the Petition?  Even if what you write is correct, I still would like to know I can get enough interest on savings to be able to "buy" again without having to use up all my principal!  The Fed's policies ARE NOT working!  So why should savers be the sacrificial lambs?

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Comment #65 by Anonymous posted on
Anonymous
#58. The main point is this: What's the chance of finding a silver bullet of a quick fix to the current situation that's been caused by many years of changes resulting from automation (including information technology), globilization and deregulation that in turn has produced heavy-duty,  downward pressures on jobs, wages, and spending that can and does create and sustain jobs? The chance of finding such a silver bullet is: Off The Radar. The Fed hasn't had and won't have a silver buillet (and, in fact, there's a lot of expert thinking that the Fed's about out of what non-silver bullets they have), whoever is Fed Chairman--Mr. Bernanke or a successor--won't have a silver bullet, whoever is elected President won't have a silver bullet, and a petition isn't a silver bullet by a long shot because if something's off the radar it's off the radar. Like it or not, these days the choices out there are pretty much doing the best you can taking the risks you're comfortable with from the choices available to you in savings, equities or even higher risk choices than equities.

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Comment #67 by Anonymous posted on
Anonymous
#65:  I have never been and will not allow myself to ever become a "do nothing" person.  I am well aware of the situation our nation is in but to have "zero interest rates" imo is just causing even more pain than we have to have.  I know there are certain things they can't do due to the immense problems brought on by "their" actions but all we savers are asking for is just a chance to not have interest rates go any lower! 

I have reconciled myself to accepting 5 year CDs in the 2% range and Bernanke doesn't even want to allow us that??  No!  I will not, and cannot sit back and not fight back.  I may not win all my fights but at least, I don't hide from them.  I can at least sleep at night knowing I "tried" and gave it my best shot.    If you prefer not to, that is your freedom of choice.  What harm would it do to just "sign" a Petition which voices our anger?  I do hope when it gets posted, you and many of the others who think it is useless will, for the sake of those of us who are doing the work, at least SIGN IT!

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Comment #59 by Anonymous posted on
Anonymous
Petitions are fun but don't do much good. In my humble opinion..

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Comment #60 by lou posted on
lou
I think you should add that we will be actively supporting and voting for only political candidates who will sign a pledge to request the resignation of Bernanke and the other members of the FOMC who have supported the zero interest rate policy. I would also include in the petition a statement explaining that since seniors vote in far greater numbers than all other demographic groups, any politican who ignores us does so at their peril

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Comment #61 by Anonymous posted on
Anonymous
 

If Bernanke admits to 2%, that means it will be 4% official inflation written in stone.

On top of that, 2014 is just an imaginary deadline. He will say at that time that we will need at least 2 more years and after that 2 more and at the end, will become permanent inflation of at least 4%, which in actual terms will be 8% on the street level.

 

And that how he will destroy our savings of what ever is left by that time.

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Comment #62 by linmarie posted on
linmarie
The way Keith McCullough put it on CNBC's Squawk on the Street this morning is that Bernanke is "basically telling you that if you are a saver you can go home and sit on that and rotate because there is nothing he is going to do.  He's absolutely pulvarized savers in this country."  Those are Keith's words.

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Comment #63 by Anonymous posted on
Anonymous
Lou #60:  I love what you wrote!  I will indeed add it to the Petition!  It's what was missing!  Thank you so much!

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Comment #64 by Anonymous posted on
Anonymous
Revised Petition:

SAVERS UNITE AGAINST SUPER LOW INTEREST RATES BY FEDERAL RESERVE

Superlow interest rates brought on by the Federal Reserve are seriously hurting retirees, other savers, and pension funds.  These superlow rates have not delivered the robust recovery the Fed expected.  Businesses are not expanding and people are afraid to spend even with such low rates.


Superlow interest rates are not stimulating the economy enough to make the destructive financial pain to savers worthwhile.


We, the undersigned, urge and petition the Federal Reserve to raise interest rates immediately to allow retirees and other savers to make worthwhile income on their savings in a safe fashion.   We want to be able to enjoy participating in the economy by being able to spend and enjoy our interest income which we acquired from many years of dedicated saving.


We are tired of the Fed ignoring the strong negative effect their policies are having and their sacrificing savers without good cause.


We are no longer "patient" with the Fed's policy which has not worked inspite of the financial suffering it has caused to savers.  We intent on complaining until it is adjusted to help savers.


We will be actively supporting and voting for only political candidates who will sign a pledge to request the resignation of Bernanke and other members of the FOMC who have supported the zero interest rate policy.


Seniors vote in far greater numbers than all other demographic groups.  Any politician who ignores us does so at their own political peril!

 

 

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Comment #66 by Anonymous posted on
Anonymous
There is a 50% chance we are going into a period of hyperinflation per key economists.   This will trigger MANY opportunities for savers who have liquid monies.

 

Don't panic.  Just wait for the stagflation

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Comment #68 by KenBDG posted on
KenBDG
Thanks for all of your comments. Based on your comments, I'm looking into a online petition. Please refer to my new post on this issue.

 

 

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Comment #69 by Michael G (anonymous) posted on
Michael G
May I ask a stupid question? If the Fed is saying that interest rates will remain ridiculously low for the next several years, why are retirees and senior citizens not putting their money into bond funds. For example, the Vanguard Wellesley Income Fund has been around for very many years and is a relatively safe investment. It has also consistently produced returns that are in excess of CD rates during the best of times. As long as rates remain ridiculously low, I think it is a good place to hold money. You can average into it and average out of it if rates start to increase and back into CDs. There are options available, if you are willing to take on a tiny amount of risk, but nobody seems to discuss them on this forum.

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Comment #70 by Michael G. (anonymous) posted on
Michael G.
I would like to further add, go to: http://quote.morningstar.com/fund/f.aspx?t=vwinx and extend the chart slider all the way back to 1970, to see how this fund has performed for the last 40 years...

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Comment #71 by Anonymous posted on
Anonymous
Michael:  I looked into that Vanguard Wellesley Fund years ago and it did seem like it could be a good investment.  However, we have to get monthly checks from our investments and I don't think that is possible with such a fund.  I purchased a different Fund from another investment firm which had a safer and better rating just to test out if not buying CDs was a better idea.  That "safe" fund started crashing a couple of years ago and I lost thousands of dollars in it before I was able to get out.  No matter what the Morningstar articles etc. say about mutual funds, you have to be willing to realize, you can loss money in them. They "are" stocks!     I was lucky to get out of mine before I lost more.  Moral of my story....I'll stick with CDs!

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Comment #72 by Anonymous posted on
Anonymous
#71: Did you, by any chance, happen to pay attention to what happened to the fund you sold a year or so after you sold out at a loss? Unlike CDs, mutual funds, even the very best, do not rise in value every month, or even every year.

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Comment #73 by Anonymous posted on
Anonymous
When dealing in Stocks and Bonds, as the fine print always states:  Past performance does not guarantee what the future performance will be (or similar wording).  Besides I, and I am sure others posting here, do not have another 40 years to wait.  That's why I stick strictly with CDs and follow  Ken's site so intently.  At some point I may have to start digging into my principal but at least I will have something to show for it rather than watch it vanish somewhere on Wall Street!

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