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Fed Siphons $100 Billion From Savers

Wednesday, November 3, 2010 - 8:37 AM
According to this Fortune article, "That's how much interest income Americans have foregone in the two years since the Federal Reserve slashed short-term interest rates to zero, according to one reading of the national personal income accounts."

I would think the cost to savers will go up substantially over the next year as savers' old CDs mature.

We should see by later today if the Fed will drive down interest rates some more via its new round of stimulus (aka QE2).
5
Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,996
1. Wednesday, November 3, 2010 - 10:24 AM
What the Fed is attempting to do is to make saving money in a deposit account such a losing proposition that one is arm-twisted into putting funds into the stock market or just going out and spending it all. What we are witnessing is the largest transfer of wealth in the history of this world. QE2 is putting the nail in the coffin for savers and will eventually spell the end of certificates of deposit. The stock market has risen almost 14% since the Fed announced their intention to launch QE2. The markets know there will be a ton of money coming their way from disgruntled and income-starved savers. It's the market-way or the highway.
5
PurplesagePurplesage25 posts since
Oct 11, 2010
Rep Points: 73
2. Wednesday, November 3, 2010 - 6:36 PM
The Fed action may not lead to market recovery at all.  it is a frantic and desperate move to save the economy.  Like the first action, it did not result in any real economy growth or recovery.  Why do people think that this one will boost up economy???

Ignore such Government "noise" and proceed with one's own prudence; i.e., do not count on any market recovery (there is none) or positive result from QE2.  I, for one, would not put into money into the stock market until I see some "REAL sign of economic recovery (which may be ten years from now:D). 
2
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,425
3. Wednesday, November 3, 2010 - 6:50 PM
The Feds...... move to save the economy.....?????  Only idiots continue to repeat actions and then expect that  the resulting outcome will be different than all the other times they implemented the same action and failed.  Desparate..... maybe,  Dumb..... DEFINITELY.  Wish someone with some common sense and authority would take over the Fed and end this maddness.
4
CandyCaneCandyCane13 posts since
Sep 29, 2010
Rep Points: 76
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