Last night, in our Church prayer meeting, one of the topics mentioned was how difficult it is these days for people on fixed-incomes to survive (what with food prices up 20-30% in the recent past).
I didn’t say it—I restrained myself—but my blood was gently boiling because one of the main culprits is systemically unjust economic policy. Savers are being brutally punished so that high-flying bankers can keep their mega-bonuses.
Now today… this.
From Bloomberg.com: “Draghi May Enter Twilight Zone Where Fed Fears to Tread.”
European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve.
While cutting ECB rates may boost confidence, stimulate lending and foster growth, it could also involve reducing the bank’s deposit rate to zero or even lower. Once an obstacle for policy makers because it risks hurting the money markets they’re trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15.
“The European recession is worsening, the ECB has to do more,” said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB’s next policy meeting on July 5. “A negative deposit rate is something they need to consider but taking it to zero as a first step is more likely.”
Yeah, let’s have banks steal their depositor’s money for the privilege of holding it. Not only will people not earn interest, they will lose money for keeping it in a bank. (Which is already a reality because of inflation, but most people are blind to that insidious, hidden “tax” on their money… convenient for overspending politicians who are able to steal from taxpayers with most of them not even realizing it!)
I’m sure this will work out nicely.
Language like this makes me want to use language I simply don’t use:
“A rate cut could have an important psychological effect in the current environment,” said Christoph Kind, head of asset allocation at Frankfurt Trust, which manages about $20 billion. “Negative interest rates aren’t an irrational concept. I’m not sure, though, whether in the case of the ECB it will have the desired effect.”
Yes, let’s forget basic economic law in favor of “psychological effects” and let’s turn nations of people into one big laboratory experiment by politicians and bankers, when even they admit it might not have “the desired effect.” These people are sociopaths!
Yeah, I’m mad as heck because these policies hurt people—and especially our elderly who did the right thing all their lives, while benefiting the irresponsible and profligate.
It’s time to vet every politician for banking support. If they get large donations from big banks and Wall Street, they need to be kicked out on their ears (and other body parts).
And the Federal Reserve needs to be ended, and forgotten forever. Yeah, they’ve resisted negative interest rates to this point, but just you wait, now that Europe has broken the ice.