History And Name Of New Deal Regulation That Gave Us 5% Passbook Savings That Was Repealed In 1980?

  |     |   2 posts since 2020

For some 50 years after the New Deal, honest savers (who knew enough to know that markets are manipulated and a suckers' bet) or those who simply did not wish to gamble; kept some or all safe and liquid at savings and loans which paid a fixed 5% return. Those who wanted to time the market or allocate used these accounts as a haven when stocks were not prudent or when bonds were heading south due to inflation. That was repealed in 1980.

In the Viet Nam era inflation, speculators discovered Treasury bills and later high yield money markets by brokers too, but today, we are all coerced into boom/bust stock cycles where nobody makes money save the same banksters who created the Creature from Jekyl Isle, printed all the money and floated the paper leading to the Great Crash, then the Great Recession and now this return to the future, where nothing is safe and savers are losing everything.

Those New Deal reforms saved the Banksters from pitchforks as did Obama [who let them throw more paper at the problem and never jailed a one of them] so today, we are now all in the same barrel, save the bosses. When Drump says he is newly outraged that they used his giveaway tax deal to buyback stock instead of build factories, the only ones he fools are those he fooled before. The New World Order owns him like they bought his daughter.

Do any of you know the Reg name [like Q or AA or whatever] that gave us such a long period of safety?

I am working on a class action that seeks to give us back some of those protections and also to remove the unreasonable tax loss limits that so may will suffer on stocks, as many have run out of time and confidence to "stay the Illuminati course".

  |     |   45 posts since 2019
Buck, It sounds like you mean Regulation Q. Only it didn't work like you think it did. It didn't set a fixed rate on savings or do anything to help savers the way you think it did.

Back when it was started, it was believed that one of the problems leading to the depression was that banks, in competition for deposits, offered higher and higher rates resulting in them taking on riskier and riskier investments in order to pay those rates.

So, to avoid that problem, Reg Q put a ceiling on rates. Originally it was 3%. eventually it got moved to 4% then 5% by the 1970s. That meant you couldn't have rates any higher than that ceiling on your passbook or other standard savings account.

You mention the Viet Nam era inflation driving people to these other high yield products, but what you failed to realize is that was precisely because of Reg Q. Throughout the 1970s Inflation was mostly in the 5% to 10% range (same for the fed funds rate) only occasionally and very briefly dipping below 5% and with several forays above 10%. With both those rates above 5%, far from helping savers, Reg Q was hurting them. Their money was shrinking in value because the rates they were getting were unable to keep pace with inflation due to the Reg Q ceiling limiting how high they could go. So to protect the value of their money, people looked for better yielding alternatives.

And we are starting to see history repeat itself - with savings interest rates dropping to near zero, people are seeking alternatives with a better yield. Something more and more will do should the rate remain near zero and inflation begins to climb.
  |     |   959 posts since 2010
Actually, savings and loans paid 5.25%, banks paid 5.0%. We were promised higher returns, not limited to the 5% range. Mortgages were typically around 8%, and we did not have run-away housing inflation.

CDs had only about then been invented and allowed, and they were getting 6%+ and with the super-inflation at that time, went up to around 13%. But once inflation was tamed, the reality of the situation came into play, and we have been shorted ever since, the standard of 5%+ has not been seen in decades, and responsible savers have been turned into dupes. And since the 2008 crash, we have been downright exploited and cheated, all benefits of our savings investment have been taken for the benefit of others, transferred by very low Fed rates, leaving us with -- now 0%.

The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.