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U.S. interest rates have soared everywhere but savings accounts

bloomberg.com

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Re: U.S. interest rates have soared everywhere but savings accounts

#351

Post by Spooky23 »

MisterMower wrote: post #340
Spooky23 wrote: post #197

Earlier quoted context omitted.

“Doubled” from rock bottom. The government flooded the zone with cash to keep the economy alive. Hell, I’m paying a 2.25% interest rate on my home. People are running around like chickens about inflation this and inflation that. The only meaningful metric is gas prices.

For a guy who bought a house with a loan at 2.25%, gas prices might be the only meaningful metric. Not everybody is as lucky as you, bud. People are watching the value of their savings evaporate before their very eyes as they try to put together down payments for a home or find a minivan for their growing family. It’s a real problem, and if you want to see what a world where it doesn’t get fixed quickly looks like, g…

I’m not saying it’s not a real problem. It’s a symptom of long standing issues that have been kicked down the road for my lifetime.

I grew up in a farm town where 30 farms circa 1990 are down to 4, and the factory in the next town employs 80% fewer people. The nations strategy for dealing with this has been to suppress the business cycle with endless cheap cash.

IMO, it won’t get better until it gets worse.

Re: U.S. interest rates have soared everywhere but savings accounts

#352

Post by hackerfromthefu »

chii wrote: post #309
nopzor wrote: post #299

Earlier quoted context omitted.

more like 3.6% with compounding interest…

well, the EE bonds aren't compounded (or they compound with an interval of 20 years). That's why i used simple interest rather than compound, so as to make the calculations easier too.

This is misleading because everything you compare it to does compound.

When people talk about an interest rate, a growth rate, an inflation rate .. everything compounds.

If you're saying 5% of some special non compounding thing thats misleading to people without financial literacy to compare to every other rate they read.

So it's more correct to say 3.53%.

Re: U.S. interest rates have soared everywhere but savings accounts

#353

Post by [deleted] »

lsiq wrote: post #225
neilwilson wrote: post #163

Earlier quoted context omitted.

Banks don’t lend money out. Never have, never will. Banks are discount houses. They create their own money against financial assets they buy from you with that money. They are factories, not warehouses. Deposit interest rates aren’t going up because there’s nowhere else the money can go. Nobody wants be the retail to wholesale middleman at present.

Thank you, was hoping for someone to point this out. Banks don't take deposits and they don't lend money. Banks create money. When they "lend," what they are legally doing is purchasing a newly issued security for your home. And they are doing so with created money, that money is not transferred from some other account. Similarly when you "deposit," the money is legally now the bank's. The bank now has a liability to…

[deleted]

Re: U.S. interest rates have soared everywhere but savings accounts

#354

Post by throw123123123 »

Kranar wrote: post #243
throw123123123 wrote: post #234

Earlier quoted context omitted.

Banks are so regulated that you can't open an account in the US unless you visit a bank branch physically.

This is simply untrue. Marcus is a fully licensed online-only bank, they have no physical branches whatsoever and everything is done through their website: https://www.marcus.com/us/en There's also Green Dot Bank which is what Apple Pay uses among other mobile payment systems. They technically have a single physical branch but you don't ever need to visit it in order to open a savings/checking account with them: http…

Only for US residents - 5% of the global pop.

Re: U.S. interest rates have soared everywhere but savings accounts

#355

Post by throw123123123 »

LgWoodenBadger wrote: post #249
throw123123123 wrote: post #234

Earlier quoted context omitted.

Banks are so regulated that you can't open an account in the US unless you visit a bank branch physically.

Since when? The last 3 or 4 bank accounts I’ve opened have been done entirely virtually.

Since 9/11.

Re: U.S. interest rates have soared everywhere but savings accounts

#356

Post by sb057 »

MisterMower wrote: post #342
sb057 wrote: post #76

Earlier quoted context omitted.

If the cause of inflation is the same amount of dollars bidding up a lesser quantity of goods, the only way to resolve the situation is to increase the number of goods or decrease demand for them.

No, the correct way to do it is to reduce the size of the money supply, or at least slow its growth. Inflation is always and everywhere a monetary phenomenon.

All other factors being equal, that would be tantamount to reducing demand. Nominal prices would fall, yes (deflation), but a failure to increase supply would result in shortages. Shrinking the money supply would have quite a similar effect to price ceilings in this scenario.
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