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Townhall
Finance...
Zero
Interest Rates Mean Zero Interest In Middle Class
by Bill
Tatro
May 9, 2012
The
financial markets have been a playground for a small select few.
Not because
they’re smarter, more experienced, or even better at what they do but
because a
group of bankers and politicians decided their own interests should
come first.
Due to ZIRP
(zero interest rate policy), seniors, retirees, and pretty much any
recipient
of fixed income were forced to take risks never before contemplated.
However, if
they wanted to make a mortgage payment or a nursing home payment, keep
the
lights on, or even have a meal, they had to forgo the safe haven of
savings
accounts, treasuries, and even CDs.
In order to
achieve a cash-flow, they had to buy stocks, junk bonds, and foreign
debt. The
justification by the central bankers was
that Armageddon was starring us in the face, and the bankers had to be
saved.
The
incompetence in the corporate world and the risk takers in the
financial world
got a free pass as they were not allowed to experience the normal
economic
cycle. Therefore,
economic contraction
was not even in the cards.
Unfortunately,
that choice was a zero-sum game. Where
there are winners, there are losers.
Just like a minimum wage part-time job
replacing a triple-digit income
professional job counting as a one-to-one exchange in the government’s
statistics, so to does the decimation of the middle class at the
expense of the
elite count only as a net neutral occurrence.
One group
wins and one group loses (+1-1=0).
Millions of people worldwide are experiencing
the end result of a policy
that will keep a few in caviar and champagne while others wonder where
their
next meal is coming from.
The last
time we witnessed such a spread between the “haves and have-nots” was
in 1929.
Inequality
has a way of working itself out in the end.
It happened in the 1930s, and so to will it
now.
The
destruction of the markets will quickly equalize those who have gained
at the
expense of others.
Jobs will
disappear, careers ruined, and fortunes lost as the elite endure the
end result
of misguided Keynesian policies.
Not only
will this occur in far away lands, but also right here at home in the
good old
USA. For the past
few years the average
citizen of the world, from Greece to China and from Portugal to Egypt,
has been
struggling to survive, never taking anything for granted. Now the bankers and
politicians are about to
experience the same scenario.
Will they
have the same survival skills?
Read this
and other articles at Townhall Finance
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