Where is the US economy headed?

As of Friday: 5 year U.S. bond yields .9% annually; 10 year- 2.06% and 30 year- 3.11%.

Do you know how much of a gain you would realize by those so-called savings rates?

First, deduct the amount of taxes on the "interest income," then figure out what your net gain would be after inflation. I get zero net gain. Some stocks that pay dividend plus their annual appreciation looks like a better place for your $€¥£.

Yes, you would lose money due to inflation and we must expect that the interest rates we see today will, sooner then later, rise well above where they are now.

How true. It's just too depressing to calculate how much I'm losing while still marginally increasing my own savings.

For what it's worth, my local and main bank is paying .3% on a 1 year certificate, and .2% on savings. Neither one is a motivator, but I can't see a one year committment to gain an additional dollar on a thousand dollar investment.

When do you think John? Before 2025? I mean getting above inflation.

But under the mattress you're losing 4%. Here anyway. +.3 is better than -4.

Quite right, and I think the spread here is about the same as there. Remember though, my comparison is between passbook savings and certificate of deposit so the difference is .1%.

Glad you mentioned matresses. They and coffee cans are really poor choices for lots of reasons. If the bank does fail, we've got deposit insurance as a fall back, and if the government defaults, that money will be worth less than its paper.

No, spendi, you will never get a rate of return on totally safe investments that outpace inflation. The spread now between 1% return vs 4% inflation (using the numbers we seem to be tossing around here) is discouraging to savers, as Roger noted.

This video is less than 4 minutes long and shows the root of all evil in our modern day economic system!

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Time to hedge that fortune of mine?



Cycloptichorn

Any idea if the following info is factual??

http://www.silverbearcafe.com/private/10.11/gaoaudit.html

Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
unelected.org

The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious - the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is "only" $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is "only" $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

"This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else." - Bernie Sanders (I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.

Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places



More on the link above.......

It's factual that the Fed loans money to banks. It is also factual that the current discount rate is essentially ZERO. It has been that way for almost 2 years.

Most of the rest of the story is false or misleading.
This is NOT the first Fed audit

http://www.publiceye.org/conspire/flaherty/flaherty6.html
So.. we start with the very first sentence being false.

Then we get to the "donations" and other terms that are used that are bogus and ignore the facts.
It was well known prior to this audit that the FED was loaning money at zero percent interest to banks. The FED has said they will keep that interest rate near zero until 2013.

http://topics.nytimes.com/top/reference/timestopics/organizations/f/federal_reserve_system/index.html


As for the total dollar amounts to each bank. Perhaps the idiot that wrote this should READ the paragraph just prior to the total amounts.

Here's a link to the GAO report
http://sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

I assume that they are assuming that they are talking about the Feds over night lending program, which is a corporate bailout program that has never been approved by the voters. However we will get all the money back, the real cost is that it greatly suppresses the market for savings, it is the reason why you can't get a bank to pay you reasonable interest on your money. The banks don't need to pay you, as the fed will loan them money for free.

How is the Feds overnight lending program a corporate bailout program? It isn't available to all corporations. It's overnight lending that requires collateral.

those that they lend to are corporations...and it is a massive wealth redistribution system as those with savings are fucked over for the benefit of those who are in debt. This program is a bank bailout program, which does carry heavy costs even though the Fed tecnically can claim that they get the money back each day.

Looking at the deals the government gives to.banks\corporations with money backed by taxpayers, the middle class gets screwed every time. They provide banks with cheap money, then they turn around and charge consumers high fees and interest. When the bank goes broke, the government bails them out - again with taxpayer money.

yep...and folk look around wondering why the middle class is shrinking so rapidly....

I don't think the middle class is shrinking hawk. It is growing.

I think you must mean that the impoverished middle class is growing rapidly. Class is not measured only by financial circumstances. We have impoverished aristocrats.

Wrong, one is no longer in the middle class when they no longer have the spending ability of the Middle Class....we have a lot of newly lower class who still for the moment have middle class values and aspirations. The travails of poverty will beat that out of them soon enough.