Elite Central Bankers Issue Report: We Took Your Money, But It Was Worth It

Australia's new Reserve Bank of Australia (RBA) Governor Philip Lowe

Years ago, a reporter asked then-Fed Chair Ben Bernanke about savers who earned less money because the Fed had slashed interest rates to zero and driven down long interest rates by printing trillions of dollars and buying bonds.

Bernanke replied that, yes, savers were hurt by earning less income, but the overall economy was better off, so it worked out for them anyway.

Retirees and others who survive on savings account interest and bond payments probably wouldn’t agree.

Now, an international central bank global committee claims the same thing.

A study from the Committee on the Global Financial System Committee (CGFS) notes that,  as well as sub-zero rates and trillions worth of bond buying, central banks have flooded their economies with ultra-cheap funding driving down borrowing costs but also putting pressure on savers and banks’ margins.

Philip Lowe, chair of the CGFS and governor of the Reserve Bank of Australia, said:

“On balance, unconventional monetary policy tools (UMPTs) helped the central banks that used them address the circumstances presented by the crisis and the ensuing economic downturn.

Lowe noted that the programs had side effects, such as disincentives to private sector deleveraging and spillovers to other countries, but were not considered “sufficiently strong to reverse the benefits of UMPTs”.

The report was prepared by a working group led by a New York Fed official Simon Potter and European Central Bank governor Mario Draghi’s former adviser, Frank Smets, who now heads the bank’s economics department.

The report claimed that central banks could need to use more of the UMPTs in the future, and that there’s no way to really know their full effects since most of the programs haven’t been unwound.

The last part falls in the category of a “blinding glimpse of the obvious,” as any saver could have told them because savings accounts still pay almost zero in most developed nations.

That’s a far cry from the 5% that could be had on certificates of deposit just before the financial crisis.

To central bankers everywhere, savers say, “Thanks for nothing.”

 

6 Comments

  1. The article describes one of the most unfair, unethical manipulations of entire financial systems for the purpose of bailing out irresponsible high rollers / money manipulators while causing great deprivation to those who have attempted to act / plan responsibly in managing their financial planning. Seems “the system” pays no heed to the growing sense of anger / frustration among those whose interests have been totally ignored / financial well being severely compromised by this “criminal” behavior. Overall…unlikely to end well.

  2. There is only one solution to this. Their money is demand notes. Give them one day to redeem them in hard assets and when they immediately default, seize and liquidate them by taking all their assets to pay off the demand notes. The U S Fed is bank owned. They screw their stockholders if they act in the public interest. So end it.

  3. This is only the tip of the ‘berg. If the democrats should manage to get control and push us into socialism the wheels will come off of everything retirees and future retirees are depending upon.

  4. I do not believe this will end well for all of us no matter what game the financial con men will improvise. So we all need to get prepared for SHTF. Power to the People!

  5. But…but…Aren’t all the stable-genius right-wingers clamoring to end that pesky Dodd-Frank nonsense, thus allowing the banks to screw whomever they desire? Now isn’t complete deregulation a wonderful thing?? We all knew we could trust the Banking industry, because they told us we could!

Leave a Reply

Your email address will not be published.


*