Lame


The Fed wants to lower interest rates. At this rate, soon they'll be negative.

The Federal Reserve Chairman, Ben S. Bernanke, indicated on Friday that the central bank was poised to take additional steps to try to fight persistently low inflation and high unemployment. “Given the Committee’s objectives, there would appear – all else being equal — to be a case for further action,” he said in a detailed speech at a gathering of top economists in Boston. Bernanke noted that “unconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used.” But he suggested that the Feds were prepared to manage the risks associated with the most powerful tool remaining in the Fed’s arsenal of weapons to stimulate the economy: vast new purchases of government debt to lower long-term interest rates.

I remember being a kid and putting money in a savings account and getting like 3-4% interest. It may have been even higher. Now, I'd happily take a stock with a dividend of that much with low growth potential. Why? Because I'd like a little return on my money. Does anyone care about how much money is being redistributed from savers to borrowers with this whole interest rate ridiculousness? I can't imagine these low rates are sustainable. It all kind of grosses me out fundamentally. It rewards borrowing, so does it come as any surprise to find ourselves in incredible debt?