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Ireland's Banking Crisis: Some Good News For Savers There

Wednesday, May 4, 2011 - 7:30 AM
Irish banks are falling over themselves to get hold of consumer cash with unsustainable interest rates for savers - one of the few plus sides to the Irish bailout... 

Ireland's banking crisis: some good news for savers | Business | guardian.co.uk
7
ShorebreakShorebreak2,365 posts since
Apr 6, 2010
Rep Points: 12,596
1. Thursday, May 5, 2011 - 12:33 AM
I guess I am moving to Ireland.
1
loulou521 posts since
Aug 3, 2010
Rep Points: 3,239
2. Thursday, May 5, 2011 - 6:13 AM
Maybe I just don't get it, but those high rates seem like a short sighted ponzi like frenzy... from institutions that are about to collapse. Savers are planners. People who think ahead. People who put off immediate wants for long term benefit. Each day brings with it more evidence that wall st, the banks, and so many govt leaders... haven't got a clue about being savers. We need leaders and bankers that have a saver's heart... not just a licking their lips attitude toward their next bonus. Where did all these crazy short sighted people come from?
1
MikeMike327 posts since
Feb 22, 2010
Rep Points: 875
3. Thursday, May 5, 2011 - 8:11 AM
"Where did all these crazy short sighted people come from?" They have been around in this country since our inception. Wall Street and share holders have a 'quarterly' mentality. All what counts are the quarterly profits, not what is one, five, ten, or twenty years down the road. This short-sighted thinking has permeated our entire society and political system. The politicians are not interested in what's good for the country, only collecting campaign donations from special interest lobbyists for their next re-election bid to stay in power. Consumers are full of short-sightedness, having purchased an iPad, immediately anticipated the iPad2, and are now awaiting the iPad3 with drooling tongues hanging out. Meanwhile, China is an example of thinking long-term. They look at centuries rather than quarters. Although not a democracy by any means, China steers it's economic ship on a long-term course in a patient, determined manner. Even now, in our country, we are  thinking what's coming minutes ahead, not even hours, days, or months any longer. There are investment firms out there basing their buy/sell equity strategy on posts on social network sites to determine immediate product preference trends. Reacting in seconds is the new normal it appears. Look for more frequent boom/bust cycles due to this type of instant anticipation. Our society and economic structure are now one big video game. Quickly now, click on it, before it's gone!
2
ShorebreakShorebreak2,365 posts since
Apr 6, 2010
Rep Points: 12,596
4. Thursday, May 5, 2011 - 8:37 AM
Shorebreak, I believe you are so right...   so if you were bernanke, what are your real options?  How do you pull the country (arguably the world) out of the pit?  With so many working against you, even accusing you of being the problem, how do you bring about the solution?  How do you put out the fire, if there are more people pouring gas on the fire and lighting new ones?

While we (on this site) seek long term planning (renovating our room in the house) while the house is on fire... and the above example as the back drop...  where does that leave us?  What good will higher rates be?  ...if the short sighted still call the shots, and as Ken pointed out, seek to remove the savers, like Hoenig, from all decision making?

All of my long term planning comes to naught, if the short sighted run the world into the ground.

What's the solution? 

The short sighted continue the destruction.

What should the savers do?
1
MikeMike327 posts since
Feb 22, 2010
Rep Points: 875
5. Thursday, May 5, 2011 - 10:42 AM
"What should the savers do?"

     Each person (saver) follows their own individual path in this chaotic situation. I have chosen to eliminate all debt, including my mortgage, from my life path. Being retired, a secure income is a necessity to remaining happy so I do not participate in the grand casino known as the equity and commodity markets. Also, I don't buy into any of the hype on the internet regarding the imminent demise of our currency and other dooms' day predictions out there. It's all designed for someone to make a profit off of those that panic and throw their nest eggs into purely speculative nonsense or sucker bets.

     For years I've followed a long-term savings strategy of laddering certificates of deposits and Treasury notes. This system has worked well for me in the past but now I must contend with living on reduced income as steadily the certificates mature and are replaced with lower and lower yielding products. I feel this low interest rate environment will be with us for at least another two to three years before Bernanke's Fed makes any significant moves upward regarding rates.  Therefore, I have modified my strategy to what amounts to a barbell approach. One-half of funds in very short-term deposit accounts and one-half in long-term certificates in the 4-5-6-7 year ranges. One could say it's a form of hedging of bets regarding rates. The elimination of debt and avoiding spending on gadgets and impulse items also helps right now. I'm not even going to get into the speculative run-up in gasoline and food prices.

     Bernanke, and the Fed, regardless of increased criticism will not make any significant moves until after the election. At this time it looks likely that President Obama, whether you support him or not, will serve a second term. Thus I expect Bernanke to remain at his present position. Finally, basically all we can do right now is buckle our seat belts and turn those jabbering idiots, pretending to be journalists or pundits on the TV and radio, off and go about the business of maintaining a fulfilling life. Good luck Mike and I enjoy your posts to this wonderful site. Cheers.
1
ShorebreakShorebreak2,365 posts since
Apr 6, 2010
Rep Points: 12,596
6. Thursday, May 5, 2011 - 12:30 PM
Shorebreak, I like your strategy. Live within your means, and try to plan for varying outcomes. Thanks for sharing the barbell approach. I think your political analysis is as accurate as one could predict, at this time. When I've listened to bernanke speak, I haven't picked up on a political leaning... I hear him challenging congress (all of them) to head toward fiscal responsibility, which I have heard as ..."Hey! I can't do this alone, you know. You guys have to get your heads out into the sunshine and use some common sense. Stop spending... I can't print enough money to satisfy your desires. Soon, we have to pay this all back. It's not our money. Help me help you." I appreciate your posts, as well. The wisdom here, at deposit accounts, is an oasis in the financial media.
1
MikeMike327 posts since
Feb 22, 2010
Rep Points: 875
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