According to a Scott Burns column in AssetBuilder, using the yield on the average one-year bank CD of 0.19 percent, you would need to have $2,909,244 in CDs to eat for a year, providing you could keep your food costs in line with the low-cost food budget outlined by the USDA. You would have to nearly double that $2.9 million if your taste in food is closer to the $158.40 a week “liberal plan.
[...] it is becoming more and more difficult for retirees to afford to buy food from their savings. Actually, that’s a gigantic understatement. If you were trying to buy food from the interest paid on your savings accounts, you would have to be rich. Not top 1 percent rich, but pretty close. Read more
This is not hyperbole. It is a fact, one that puts the absurdity of the Federal Reserve zero interest rate policy in harsh perspective.
How do we get from the supermarket to what they call ZIRP in the cake-eating Versailles known as the District of Columbia? Easy. Figure out how much you need to have on deposit in one of our coddled banks to earn enough interest to buy a week’s worth of groceries.
Here’s how you do it.