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Interest Rates Are Near Historic Lows - Fact Check

Friday, August 16, 2013 - 5:11 AM
Allan Roth makes a point in his CBS MoneyWatch article that if you look at after-tax real yields rather than before-tax nominal yields, our current rate environment is actually better for savers than the rate environment of 1980. Savers may have suffered in 1980 due to high inflation, but those who locked into long-term Treasury notes/bonds and long-term CDs were in good shape when inflation and rates fell.
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Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,675
1. Saturday, August 17, 2013 - 9:29 AM
Inflation helps those in debt because you are paying back loans with inflated dollars. It punishes those that have their money in savings because your money will purchase so much less.  Interest rates on savings will go up as inflation goes up. Be careful what you wish for. 
3
AllyAlly774 posts since
Jan 16, 2010
Rep Points: 2,257
2. Saturday, August 17, 2013 - 12:52 PM
"Framing the argument by rates alone, it's easy to see how investors could view 1980 as a good time to own bonds and CDs, and today as being, well, a not so good time."

Hindsight is always 20/20.  I failed to see the comparison of the 80s with the current rate environment (with inflation as a random variable).  This is one example article that I would not take seriously.

Just me. 
1
51hh51hh1,460 posts since
Jan 16, 2010
Rep Points: 6,348
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