COMMENTARY | Yesterday, the US FOMC press release indicated another month with rates unchanged. The central bank rate remains at a paltry 0.25% … again. Same as last month, and so on. This has gone on long enough. The economy will never get legs for a full recovery with low interest rates. Other forces need to come together to boost the economy, which is, in fact, happening. The economy is recovering. Signs of a US economic recovery are everywhere. The time has come to embrace the improving employment numbers, and stop chanting "the sky is falling."
However, low interest rates are robbing us of our future. Our IRA's, savings accounts, and nest eggs aren't growing - they're stagnating. None of us will have a retirement account worth speaking about if rates continue to be this low. I miss the Clinton years with 5 to 7% interest rates on my IRA funds. At under 1% (for far too long) my retirement savings accounts are not growing.
Many of us in U.S. are forced to move our money overseas to foreign accounts in order to get 2.5 or 3% (in Australia, for example), or forced to take on risky stock purchases here at home. This isn't what we want to do, but we're forced to do so. If we want any kind of a nest egg in 20 years, we can't sit idly by with a sub-1% return. I'm tired of the fed whining and spinning its wheels. If US interest rates don't reach 3% by 2015, there will be no hope for this generation's IRA accounts. History is a strong educator, but current events are evidence that Bernanke and his committee have no interest in history.
I'm disappointed by this week's FOMC minutes. I'm pulling half of my funds out of my US accounts and seeking alternatives. It's time to stop waiting for the Fed to figure out how to solve the puzzle. We need to do it ourselves. Downplaying the recovery is a tactic that's long overstayed its welcome. I'm not sure what the Fed hopes to gain by it. The time for higher interest rates is today (or even yesterday), and that in itself would continue to help the average American. The Fed doesn't seem to know how to give this recovery the legs it needs to continue. We have to think about more than today; our future is in jeopardy. I don't want to work all the way to age 72. Not all of us have a million eggs set aside yet, Mr. Bernanke.
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