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Where are savings accounts?
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:date: 2015-02-03T14:05:01
:category: faith
:tags: politics, economics, banks
(my comment on `the EconTalk show on banking`_)
.. _`the EconTalk show on banking`:
http://www.econtalk.org/archives/2015/02/luigi_zingales_1.html
@John Reisink
I am afraid the reason is that we don’t have that much choices.
Which leads me to the issue which I am quite surprised nobody discusses
at all (what am I missing?). As I understand the dim archaic past of
something like thirty years ago, in a civilized country then (in that
time I was growing up in the Communist Czechoslovakia, so no
civilization for me), people took their excess money to their local bank and
they got some reasonable interest on it. What I do remember is that when
I was moving for our PhD studies to States in the year 2000 we got in
the university FCU something like 4% p.a. on the savings account. Then
the Internet Bubble burst, and of course rates went down to around 1%
p.a., so I stopped bothering with savings account and I had to start to
invest somewhere else. Meanwhile, we didn't have enough money so
investing stopped being interesting to me at all. However, looking
around me now, I don't see much change from those around-1%-pa times.
Still the same FCU has today on 18month certificate rate 0.8% p.a. which
kind of doesn’t make any sense to use.
Is it just me, but this is all result of politicians (BOTH Republicans
and Democrats) swindling their way out of the economical situation by
robbing not only future (by creating incredible loans ... look at
Greece to see where we are heading globally, IMHO) but also by stealing
all savings by keeping the interest rate artificially low. It is funny
to hear all those bankers to cry out for more loans, when they keep
interest rate at 0%! Who in the world would loan a money, when a) they
have none in the bank (because nobody saves anything), and b) the
interest is so tiny, that it doesn't make much sense to loan.
Am I completely wrong, or it is a big white elephant in the room which
is constantly overlooked by everybody? Is there some show on EconTalk
about this issue?
Am I right thinking that Mr. Greenspan, Bernanke, and Ms. Yellen wiped
out consumer banking and small people savings? Why should I invest on
the market myself? I would rather handed my money down to some
specialist who would do it better than me (considering, I would get some
reasonable interest back)?
What would actually happen if the central banks of whole world stopped
meddling with the interest rate and let it stay at some higher level? Of
course, the first reaction would be radical crash of the market, but if
you stayed on this normal interest rate for longer time, wouldn't the
market accommodate and result would be a bit more healthy in total?
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