When you take action, there is usually an intended or unintended reaction. In order to support his banker friends, the jury is still out on whether Ben Bernanke intentionally drove retirees to risk their life savings.
Millions of seniors have subsisted on Social Security, pensions, and bank savings for many years. Their risk tolerance was low and a 3% CD rate was sufficient to meet their daily needs.
Mailbox money that consistently arrived on a monthly basis allowed these folks to plan their entire lives.
Yes, retirees understood inflation, not the type we experienced in the 1970’s, but rather the controlled, acceptable 2% or 3%.
Even though this normal rate of inflation caused prices to increase, it also allowed for higher rates on savings accounts.
Periodically, with a little extra cash, they would buy a popular mutual fund, or a stock with good fundamentals.
Of course, those investments were for the long-term, and more than likely were intended for their children or grandchildren.
With ample Social Security and pension income, there was no need for seniors to rely on stocks or mutual funds for a living.
Then along came Chairman Ben and his echoes of Alan Greenspan with interest rates lower than imaginable: CDs at 0.59%, money market accounts at 0.25%, 2-year treasury notes at 0.26%, and savings account at 0.28%.
Savers were completely stunned when they experienced essentially no return on their money.
It was no longer a red-hot statistic; it was a cold-hard fact that retirees could no longer make ends meet.
Less money, more expenses.
What was a person on fixed income to do?
Ask Bernanke and his Wall Street cronies, and they will say its simple: Take more risk. Just withdraw your life savings, and reposition it into junk bonds, or maybe a good international stock fund.
Or, how about some Netflix stock?
Regardless of one’s choice, the markets that receive this money will supposedly move higher and higher, until one day when the bull runs out of energy.
The criminal activity of Ben Bernanke has put several generations at risk for not only their savings, but their lives in general.
When the financial markets collapse and the saver turned investor loses it all, the response from Ben and his cohorts will probably be “Well, that’s the market.”
Saver turned investor is not a pretty sight, but its occurring every single day.
This could be the most significant intended or unintended consequence of this whole financial farce.
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