so1970
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Posts: 176
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Post by so1970 on Apr 28, 2011 12:58:06 GMT -5
i've been thinking on this also, and what will happen in the economy when bernanke steps down?
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phil5185
Junior Associate
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Post by phil5185 on Apr 28, 2011 14:02:43 GMT -5
Would some different policy on the part of Bernanke and the Federal Reserve benefit someone like my mother better? She relies on a pension and keeps the bulk of her savings in cd's. CDs, money market, and savings accounts are designed to provide safe storage of capital - ie, no loss due to inflation. So it would be almost no change in her situation. Eg, in the 80's we had 10% to 12% inflation and 12% to 14% CDs, so pensions, CDs, and fixed incomes received a 'real' 2%. That is about the same as now, she probably earns 1 or 2% and has almost no inflation. I remember Stockman, he was 'taken to the woodshed' by Reagan.
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❤ mollymouser ❤
Senior Associate
Sarcasm is my Superpower
Crazy Cat Lady
Joined: Dec 18, 2010 16:09:58 GMT -5
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Today's Mood: Gen X ... so I'm sarcastic and annoyed
Location: Central California
Favorite Drink: Diet Mountain Dew
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Post by ❤ mollymouser ❤ on Apr 28, 2011 14:10:55 GMT -5
Personally, I'd love to see interest rates on savings to be at least 5%.
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Post by Savoir Faire-Demogague in NJ on Apr 28, 2011 14:15:55 GMT -5
Interestingly enough, anyone of us here who has retired parents living off a pension, would be glad The Bernke favors Wall Street, because that is where their pension money is invested.
I'd love to see the equities markets rise 15-20% per year, would do wonders for my 401K and IRAs...
But I digress.
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Gardening Grandma
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Post by Gardening Grandma on Apr 28, 2011 14:25:45 GMT -5
Personally, I'd love to see interest rates on savings to be at least 5%. And inflation at 7 or 8% No thanks!
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Deleted
Joined: May 2, 2024 23:06:58 GMT -5
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Post by Deleted on Apr 28, 2011 14:35:57 GMT -5
And inflation at 7 or 8% No thanks! [/quote] I am currently sitting on savings and a lot of low interest debt. I haven't lived through high inflation, but it would seem like I would be paying back debt with cheaper money. Maybe I am thinking about this wrong though.
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Deleted
Joined: May 2, 2024 23:06:58 GMT -5
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Post by Deleted on Apr 28, 2011 14:36:35 GMT -5
This message has been deleted.
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Post by jarhead1976 on Apr 28, 2011 14:39:49 GMT -5
Get the F%$K of the planet before you destroy it. The dollar has lost 95% of its value since the inception of the Federal Reserve in 1913.
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Post by Savoir Faire-Demogague in NJ on Apr 28, 2011 14:44:02 GMT -5
Get the F%$K of the planet before you destroy it. The dollar as lost 95% of its value since the inception of the Federal Reserve in 1913.
The Fed has also provided an expanding money supply that has fed the most successful economic system in the history of mankind. We are enjoying the standard of living we do, because of this.
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Post by jarhead1976 on Apr 28, 2011 14:46:37 GMT -5
The AMERICAN FARMER feeds us the fed just prints paper.
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Post by Savoir Faire-Demogague in NJ on Apr 28, 2011 14:48:01 GMT -5
The AMERICAN FARMER feeds us the fed just prints paper.
We import a lot of our food from various countries, Mexico, South America, Asia...
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Post by jarhead1976 on Apr 28, 2011 14:53:39 GMT -5
I am grateful Savior. That paper $$ buys less of those goods everyday.
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Gardening Grandma
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Post by Gardening Grandma on Apr 28, 2011 15:02:26 GMT -5
High inflation does reward fixed debt, BUT you can't get a 5% mortgage when inflation is at 7, 8 , or 9%. Your mortgage rate will be above the going inflation rate. EVERYTHING you buy is going up (not just gas). If your earnings do manage to stay up with the inflation, it's likely to push you into a higher tax bracket even though your buying power has not increased. Back in the 70's and 80's (when inflation was double digits), folks who had taken out mortgages years earlier benefitted, but higher property assessments raised their property taxes sometimes to the point where they were forced to sell. It really hurt retirees who had worked and saved all their lives. And it's one reason a cola was added to SS. But the cola doesn't reflect rising costs of food and energy so while it helps a bit, it doesn't negate those increases.
Our pensions are fixed and I fear inflation as much as cancer or Alzheimers.
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