Giant Misdirection, Americans Save More While Their Real Wealth
by Bill Sardi: Why
Hasnít the Day of Financial Armageddon Occurred Yet?
What a time
for Americans to begin replenishing their savings accounts, at the
exact time when they are likely to be penalized for doing so.
For the past
30 years Americans have been saving less and less money and only
with the recent economic downturn beginning in 2008 did Americans
begin to re-stock their savings accounts. The American consumer
economy has benefited as Americans chose to spend rather than save.
savings are on the way up again, up to 4%
in December 2011 from 3.5% in November, the highest savings
rate increase in five months.
upsurge in savings was made possible by a $61.3 billion increase
in total personal income in December compared to just $7.4 billion
in November. Americans chose to save a great deal of that money
rather than spend it.
But the Federal
Reserve Bank has just re-launched another round of cheap-money,
which is what triggered the economical bubble that burst in 2008,
with assurance that interest
rates banks pay for money will stay at rock-bottom rates at least
till 2014. While getting into debt may be easier, the yield
on savings accounts (~1%) is less than the stated rate of inflation
(~3%), and far less than the real rate of inflation (7-10% says
ShadowStats.com) when employing 1980 and 1990 methods to determine
the cost of goods and services.
Five more years
of this policy will nearly halve the value of Americansí banked
money, however the dollar number in their bank accounts will grow
slightly, deceiving them into believing their money is growing albeit
ever so slightly, because there is no comparative measure of inflation
next to it.
one online inflation
calculator which offers users the ShadowStats formula for estimating
inflation, $1000 in the bank in 2010 would have lost $89.20 in value
by 2011 against a 1% gain (410) in bank interest for a net loss
in purchasing power of about $79.20. If that $1000 were placed in
an interest-bearing account for 5 years at 1% interest it would
erode in value via inflation by $437.34.
or other sources providing Americans with an estimation of the real
purchasing power of their incomes, Americans will continue to be
deceived into believing their money is safe in US savings accounts.
In fact, if we are to believe ShadowStats, every American needs
to go to their employer and demand a 7-10% annual increase in pay
just to keep up with the cost of living.
If the masses
only knew how Federal Reserve Bank inflationary policies are covertly
eroding their wealth, to the point where most Americans will need
to rely upon Food Stamps in five years, there would be public outrage.
Right now, American savers are unwittingly capitalizing US banks
at a loss while bankers are announcing dividends for their stockholders.
It is an unconscionable moment in American banking. Say bye-bye
to the American middle class.
Department of Commerce: Bureau of Economic Analysis St.
Louis Federal Reserve Bank
Income and Outlays
Adjusted Annual Rate
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
latest book is Downsizing
© 2012 Bill Sardi Word of Knowledge Agency, San Dimas, California.
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