3 ms·
Saving for retirement is hard due to the government's inflationary policy. The returns on savings accounts, bonds, or other traditional savings vehicles are unt
by altria 9y ago
Saving for retirement is hard due to the government's inflationary policy. The returns on savings accounts, bonds, or other traditional savings vehicles are untenably low. Thus, every Mom and Pop is thrusted into speculative investments such as the stock market or real state. Small wonder then they seek to protect their home equity. It's largely their only retirement plan.
- morio 9y agoIt's the other way around. A deflationary economy forces the feds to lower interest rates to encourage lending. We've had record breaking low inflation rates for a decade now. A 'healthy' inflation rate would be in the 3.5-4.0% range. Yes, money is supposed to lose value. If it did not no one would spend.
- adrianN 9y agoPeople would still buy things they need. They might not buy things they don't really need, but that doesn't sound like such a bad thing to me.
- megiddo 9y agoThat's nonsense. There's no objectively healthy inflationary rate. Low interest rates are the key factor in driving demand for borrowing. Low interest rates signal a healthy supply of savings from which to borrow. So, low interest rates naturally match a large supply to a healthy demand. Such a scenario would create a market for investment-led expansion. High interest rates signal the opposite. Either the supply of available savings is insufficient, or relative demand is high enough to drive out uncompetitive demands for savings.